Trump, 3M reach deal over masks
The Trump administration eased a ban on exports of personal protective equipment, with the list of exemptions growing after lawyers laid out the shortcomings of the rules, people familiar with the situation said.
Exports to Canada, Mexico and U.S. entities such as military bases abroad are among the exemptions, according to an internal Customs and Border Protection memo obtained by Bloomberg News. It also singles out shipments by 3M Co., which U.S. President Donald Trump had originally blocked from sending N95 masks to Canada and Latin America. He reversed course last week after reaching a production agreement with the company.
The medical system in the U.S. -- which leads the world in infections with more than 580,000 confirmed COVID-19 cases -- is grappling with shortages of protective gear for health-care professionals. Competition for crucial medical supplies is fueling confusion and suspicions between the states and federal government over conflicting priorities.
Last week, the Federal Emergency Management Agency issued a temporary rule that would require all exports of certain masks, gloves and other materials used in the U.S.’s coronavirus response to get “explicit approval” from FEMA.
The rule included a single exemption -- for covered materials that are made by or on behalf of U.S. manufacturers with continuous export agreements with customers in other countries. And the exemption only applies if at least 80 per cent of that manufacturer’s domestic production was distributed in the U.S. in the past year.
Within hours of publishing that rule, FEMA and CBP representatives were flooded with emails and phone calls asking for clarity.
On a conference call the agencies held last week, companies and their lawyers laid out the shortcomings of the rule: What if a multinational firm ships products to one of its offices overseas because they’re needed for personal protection, but not for sale? One participant noted that their shipment, addressed to a U.S. military base in the Middle East, was halted because it didn’t fit the definition of the exemption under the rule, three people familiar with the call said.
The CBP memo, dated April 9, adds that the focus of the ban is on “commercial quantities,” which it defines as shipments valued at US$2,500 and containing more than 10,000 units of gloves, masks and other covered materials.
A CBP spokeswoman didn’t respond to a request for comment.
While the internal guidance is seen as a way to help administer the export ban, the document has not been made public, leaving exporters in the dark on any modification that may have been made to the rule.
The rule reserved the right for the FEMA Administrator to establish additional exemptions “that he determines are necessary or appropriate to promote the national defense and will announce any such exemptions by notice in the Federal Register.”
Such a notice has yet to be published.