Trump Seeks to Block 3M Mask Exports and Grab Masks From Its Overseas Customers The move would significantly expand the American government's reach and reverse President Trump's hesitant use of the Defense Production Act. WASHINGTON — The Trump administration is using a Korean War-era law to redirect to the United States surgical masks manufactured by 3M in other countries as part of a heated pressure campaign to force the Minnesota company to cut off sales of surgical masks abroad. The policy is a significant expansion of the American government's reach and a reversal of President Trump's hesitant use of the Defense Production Act, which allows the administration to force a company to prioritize the U.S. government over competing orders. But in this case, the administration is invoking the law to compel 3M to send to the United States masks made in factories overseas and to stop exporting masks the company manufactures in the 9 United States. Those moves, some trade and legal experts fear, could backfire and prompt foreign governments to clamp down on desperately needed medical necessities destined for the United States. On Friday evening, the Trump administration issued an executive order directing federal emergency management and health officials to use the law's authority to preserve respirators, surgical masks and surgical gloves for domestic use. In an accompanying statement, Mr. Trump criticized "wartime profiteers," which he said included speculators, warehouse operators and some well-established distributors with the ability to "unscrupulously" divert inventory from hospitals and state governments to foreign purchases that are willing to pay a premium. "Nothing in this order will interfere with the ability of P.P.E. manufacturers to export when doing so is consistent with United States policy and in the national interest of the United States," the statement added, referring to makers of personal protective equipment. Peter Navarro, the White House trade adviser who has been put in charge of policy related to the act, leveled a broadside on Friday against 3M, all but accusing it of disloyalty. "While hundreds of other large American multinationals are stepping up with pride and patriotism, 3M remains an outlier and its propaganda war must stop," Mr. Navarro said in an interview, adding that the company was "operating like a sovereign profit-maximizing nation internationally." In a segment on Fox News Thursday night, Jared Moskowitz, the director of the Florida Division of Emergency Management, said that 3M officials had told him they could not fulfill the state's order for protective gear until they satisfied contracts for foreign customers. In a statement on Friday, 3M defended its actions and said the administration had also asked it to stop exporting respirators made in the United States to Canada and Latin America — a request it said carried "significant humanitarian implications" for people in those areas. Mr. Navarro denied the administration had made that demand, but he said the White House was using the wartime act to provide "all of the N95 respirators it can possibly muster to prevent Americans from dying." He accused the company of diverting supplies from hospitals and health care providers overseas to make a profit. 3M said that the administration had used the Defense Production Act to request that the company increase the number of respirators that it imported into the United States from its overseas operations, and that it was complying. This week, 3M said, it secured approval from China to export to the United States 10 million N95 respirators that the company manufactures there. But the company warned against moves to stop its exports. 10 "Ceasing all export of respirators produced in the United States would likely cause other countries to retaliate and do the same, as some have already done," 3M said. "If that were to occur, the net number of respirators being made available to the United States would actually decrease. That is the opposite of what we and the administration, on behalf of the American people, both seek." That plea was ignored at the White House on Friday, where the president and Mr. Navarro appeared determined to wage war on 3M. "All we get from the C.E.O. on down to the head of their P.R. department is lie upon lie, the latest of which — which is dead wrong — is that we demanded 3M not send production from its U.S. plants to our friends and allies in Canada and Mexico," Mr. Navarro said. The tense fight between the administration and the manufacturing company comes as countries around the world are scrambling to secure protective gear, the federal government's national stockpile has dwindled and states have been left to compete with one another and with the federal government for a limited supply of medical supplies sold around the globe. When the Federal Emergency Management Agency finds and procures medical gear overseas, the administration takes 20 percent of that while 80 percent is issued to the private sector for distribution, agency officials said. FEMA keeps a small portion of that 20 percent while helping distribute the rest to places struggling with the outbreak, officials said, adding that the next shipment would be sent to New York, New Jersey and New Orleans. When the private sector procures the equipment from abroad, the federal government controls the distribution of roughly half of the supplies. Local hospitals and states have accused the federal government of swooping in at the last second to claim deliveries of protective gear for ambulance drivers, fire fighters, police and hospital workers. Garren Colvin, the head of the board for the Kentucky Hospital Association, wrote to members of Congress on Thursday saying four shipments of protective gear were taken by the Federal Emergency Management Agency before they could be delivered to the local hospitals that had originally contracted for the supplies. FEMA officials said the agency was using the routine procurement process and was simply outbidding local governments and states on certain procurements. The federal agency has been forced to not only expand its search for medical equipment across the globe but also be judicious with the lifesaving supplies it distributes to states. FEMA this week began sending a questionnaire to states seeking ventilators, asking about available resources and whether hospitals had tried converting anesthesia machines. The questionnaire also advised that states should not expect a delivery of ventilators unless patients were at risk of dying within 72 hours without the devices. FEMA has warehouses of 11 supplies situated strategically around the United States to be able to deliver supplies within 10 hours, an official said. And in using the Defense Production Act, Mr. Navarro again cited the scarce availability of resources. The act gives the administration expansive powers to secure supplies, including forcing a company to prioritize the federal government's contract or even determining the distribution of products made by a company like 3M. For years, the Defense Department, including under the Trump administration, has used the law to prioritize thousands of orders. "While 3M is doing this in the name of preserving their bottom line and international relationships, Americans are dying and American heath care workers are defenseless," Mr. Navarro said. But some administration officials worry that the Defense Production Act is now being weaponized against specific companies and that it could undermine incentives for other companies to offer help. Others warned that using the act to control a company's overseas production would put that company in the difficult position of being forced to violate its previous obligations to foreign customers to comply with the demands of the American government. "It's D.P.A. by impulse," said Jeffrey Bialos, a former under secretary of defense for industrial affairs for the Clinton administration. He said the administration should instead use the law as leverage. "You have the carrot and the stick," Mr. Bialos said. "If you were a sophisticated person or group doing this you would use the carrot and the stick to get more from the industry today to facilitate production for the future." Despite Mr. Navarro's order, critics say that the administration was encouraging American exports of masks and other protective gear, even as it should have been preparing medical supplies for the crisis to come. Representative Lloyd Doggett, Democrat of Texas, pointed out that the Commerce Department was still advertising measures to help American businesses export medical products to China as late as mid-March, even after administration officials told Congress they might face a shortage of face masks. In January and February, United States exports of ventilators and oxygenation products to China were up 138 percent from the previous year, while exports of gas and face masks with filters rose 1315 percent, according to data from the Census Bureau analyzed by Mr. Doggett's office. Exports of protective garments were up 493 percent in the same period, while exports of disinfectant products rose 225 percent, the data show. "Ignoring the obvious need to prepare for a pandemic, the Trump administration promoted substantially increased export of face masks, ventilators, and other vital equipment to China 12 rather than protecting our health care workers," Mr. Doggett said in a statement. "Many Americans are now paying with their lives for Trump denial, delay, and deception." Ana Swanson and Zolan Kanno-Youngs reported from Washington, and Maggie Haberman from New York. Jonathan Martin contributed reporting from Washington, and Jack Nicas from Oakland, Calif.

Question-On behalf of 3M, propose and illustrate a practical export distribution channel with appropriate adoption of several export intermediaries. The channel should begin with manufacturer in home market and end with end user(s) in overseas market. As a representative of 3M, you are required to target any ONE (1) host market and discuss each selected export intermediary with proper justification of their roles or functions.

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