Trump's trade war exacerbated shortage of medical equipment

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Hospital workers on the front lines of the fight against coronavirus are reporting dangerous shortages of supplies such as masks and gloves. Trade experts accuse President Donald Trump of politicizing the pandemic and risking the lives of first responders by continuing to wage his trade war against China.

White House trade adviser Peter Navarro is spearheading plans for an executive order to have federal agencies such as the Departments of Health and Human Services, and Defense obtain medical equipment and supplies from American manufacturers.

“We need to have them buy that from American producers on American soil,” he told CNBC.

March 27, 202005:57

Trade experts say the timing couldn’t be worse. “There’s absolutely no reason at all to do that now,” said Michael O. Moore, a professor of economics and international affairs at George Washington University. “There’s no long-term economic benefit to not allowing medical supplies to come in while we’re in the middle of a health crisis.”

Many of the key personal protective equipment items healthcare workers need are Chinese in origin. According to the Peterson Institute for International Economics, roughly half of the PPE items the U.S. imports come from China, and the percentages are much higher for some items: 70 percent of mouth-nose protective equipment and 57 percent of goggles and visors. Additionally, 45 percent of protective garments and 39 percent of gloves the U.S. imports come from China.

“China makes 120 million masks a day, while U.S. hospitals are asking volunteers to make them at home. We need Chinese PPE, ventilators and much more now.”

“China makes 120 million masks a day, while U.S. hospitals are asking volunteers to make them at home. We need Chinese PPE, ventilators and much more now,” said Peter Petri, a professor of international finance at the Brandeis International Business School.

The U.S. doesn’t have the supply chains and manufacturing capabilities it would need to make all of this equipment. Shifting a global production process is a complicated, costly process under the best of circumstances — which current conditions are not. The Association for Accessible Medicines, a pharmaceutical trade group, also argued that the rule would cripple Americans’ ability to get medications quickly and cheaply.

The proposed executive order isn’t the only White House trade policy hurdle facing healthcare providers. It has only been within the last two weeks that officials have exempted some of this equipment from Trump’s tariffs on Chinese imports, when the U.S. Trade Representative’s office suspended tariffs on a handful of Chinese medical supply imports.

Among the excluded items are disposable shoe covers and certain kinds of single-use masks, but Bown characterized these exclusions as piecemeal and inadequate in the face of a global pandemic, especially since the tariffs will be reimposed beginning in September, when some public health experts say the U.S. still could be dealing with the effects of the coronavirus.

“The exclusions are defined based on what some specific companies or industry groups request — but if there are other tariffs still in place and no one requests they are taken off, they remain in place,” Bown said. “The tariff exclusions that have been granted thus far are temporary, and there is no ability for the public to know if they are comprehensive in removing the tariffs from all COVID-19 treatment-related products.”

Similarly, trade experts criticized the USTR’s opening of a docket inviting requests for additional tariff waivers as too little, too late.

The USTR comment process is not well suited to meet the urgency of medical supply shortages,” said Dean Pinkert, senior counsel at Hughes Hubbard & Reed, and a former commissioner with the International Trade Commission.

In order to a request a tariff waiver, organizations must submit purchase records from Chinese suppliers, including units and dollar values, for the last three years. They also must document “whether the particular product is available only from China and specifically whether the particular product and/or a comparable product is available from sources in the United States and/or third countries,” as per USTR instructions.

Requestors also must make a case that the tariffs would cause “severe economic harm” to their organization or the U.S. in general, and verify that the product in question is not a part of a Chinese state-run industrial initiative.

“This is bureaucratic inertia,” Moore said. “People are focused on other stuff,” he added, pointing out that hospitals and medical supply distributors are operating in crisis mode and don’t have the available resources to address the administrative demands of the request process.

“Doing this kind of comment process is just too cumbersome,” Pinkert said. “If the goal is to move very very quickly on this, I think the public health experts should be saying what are the areas of need, what are the areas of shortage… This is a moving target.”