Tag Archives: Defense Production Act

Biden supply chain ‘strike force’ to target China on trade

“We’re trying to understand all of the logistics behind the supply chain” to loosen bottlenecks, Jared Bernstein, an economic adviser to Biden, told Reuters. “One of the best ways to do that is to talk to people in the industry and we’re doing a lot of that.”

The United States faced serious challenges in obtaining medical equipment during the COVID-19 epidemic and now faces severe bottlenecks in a number of areas, including computer chips, stalling production of goods, such as cars.

While the White House said it is working closely with private industry to find solutions for the shortages, officials also said companies were part of the problem.

“Decades of focusing on labor as a cost to be managed and not an asset to be invested in have weakened our domestic supply chains, undermining wages and union density for our workers,” and made it harder for companies to find skilled talent, Sameera Fazili, deputy director of the National Economic Council, told reporters.

U.S. agencies are required to issue more complete reports a year after Biden’s order, identifying gaps in domestic manufacturing capabilities and policies to address them.

TRADE WARS WITH ALLIES NOT WANTED

But the White House offered little in the way of new measures to immediately ease chip supply shortages, noting in a fact sheet that the Commerce Department would work to “facilitate information flow” between chip makers and end users and increase transparency, a step Reuters previously reported.

In medicine, the administration will use the Defense Production Act to accelerate efforts to manufacture 50 to 100 critical drugs domestically rather than relying on imports.

And to address supply bottlenecks from lumber to steel that have raised fears of inflation, the administration is starting a task force focused on homebuilding and construction, semiconductors, transportation, as well as agriculture and food.

“We fully expect these bottlenecks to be temporary in nature and to resolve themselves over the next few weeks,” said Fazili.

Semiconductors are a central focus in sprawling legislation currently before Congress, which would pump billions of dollars into creating domestic production capacity for the chips used in everything from consumer electronics to military equipment.

Biden has said China will not surpass the United States as a global leader on his watch, and confronting Beijing is one of the few bipartisan issues in an otherwise deeply divided Congress.

But some lawmakers have expressed concerns that a package of China-related bills includes huge taxpayer-funded outlays for companies without safeguards to prevent them from sending related production or research to China.

The White House said a measure of success of the supply chain effort would be more diverse suppliers for crucial products from like-minded allies and partners, and fewer from geopolitical competitors.

“We know that as we strengthen cooperation with our allies and partners, we also have to push back against unfair trade practices by competitor nations that have hollowed out the U.S. industrial base and undermine our supply chain security,” said Harrell.

(Reporting by Michael Martina, Trevor Hunnicutt and Heather Timmons in Washington; Editing by Mary Milliken, Nick Zieminski and Matthew Lewis)

White House says it is working to speed early production of J&J COVID-19 vaccine

By Dania Nadeem, Rebecca Spalding and Julie Steenhuysen

(Reuters) – The Biden administration is exploring every option for increasing manufacturing of Johnson & Johnson’s COVID-19 vaccine, which is under regulatory review, and said on Friday that currently expected levels of early doses were less than hoped.

The White House has invoked the Defense Production Act to help Pfizer Inc ramp up COVID-19 vaccine production and that “every option” was on the table to produce more Johnson & Johnson vaccine should it be authorized.

It will also use the wartime powers to increase at-home COVID-19 tests, and make more surgical gloves in the United States, officials said at a Friday media briefing.

“As is the case with other vaccines, we have not found that the level of manufacturing allows us to have as much vaccine as we think we need coming out of the gate,” said Andy Slavitt, senior adviser to the White House’s COVID-19 response team, referring to the J&J vaccine.

J&J applied on Thursday for U.S. emergency use authorization. It expects to have some vaccine ready for distribution as soon as authorized but has not said how much.

Emergent Biosolutions’ Chief Executive Robert Kramer said in an interview on Friday that the company currently is making bulk drug substance for J&J “at large scale.” Emergent is only producing bulk vaccine, which is then filled into syringes or vials and packaged for shipment by another contractor.

Kramer said they were on track to make enough product for hundreds of millions of doses a year. It remains unclear what other supply bottlenecks may be. Kramer said his company had already benefited from the Defense Production Act under the Trump Administration, which helped the company get to the point where it’s ready to go.

Under the authority of the Defense Production Act, the government will give priority ratings to two components important to Pfizer’s vaccine production – filling pumps and tangential flow filtration units, the officials said.

“We told you that when we heard of a bottleneck on needed equipment, supplies, or technology related to vaccine supply that we would step in and help, and we were doing just that,” said Tim Manning, the supply chain coordinator for the national COVID-19 response.

The government will also invoke its powers under the Defense Production Act to increase at-home COVID-19 tests with six, unnamed manufacturers, aiming to produce 61 million tests by the summer, Manning said.

It will also invoke its powers to increase the nation’s supply of surgical gloves, which are made almost exclusively overseas.

Manning said the government will build factories that make the raw materials for surgical gloves and help build plants in the United States to make the gloves.

By the end of the year, he said, the United States would be able to produce a billion gloves a month.

Officials have said that once J&J’s vaccine is authorized, it would mean that millions more doses would be available to states. The vaccine is one-shot, as opposed to Pfizer’s and Moderna Inc’s two-dose vaccines, and can be stored in a refrigerator.

Officials have hoped that the ease of giving the J&J vaccine will mean that states will be able to more quickly immunize residents.

(Reporting by Dania Nadeem, Rebecca Spalding and Julie Steenhuysen, Editing by Peter Henderson, Steve Orlofsky and David Gregorio)

3M to make more face masks, ramp up imports to U.S. after Trump order

3M to make more face masks, ramp up imports to U.S. after Trump order
(Reuters) – 3M Co said on Friday it would increase the production of respirators and import more masks into the United States, after President Donald Trump invoked a law to help ease a shortage in the items needed to protect health staff against the coronavirus.

The company said it will work closely with the Federal Emergency Management Agency to prioritize orders for the masks.

Trump slammed 3M in a tweet late on Thursday after earlier announcing he was invoking the Defense Production Act to get the company to produce face masks.

The Defense Production Act, which was passed in 1950, grants the president the power to expand industrial production of key materials or products for national security and other reasons.

U.S. trade adviser Peter Navarro said that the government had some issues making sure that enough of the masks produced by 3M around the world were coming back to the United States.

“The narrative that we aren’t doing everything we can as a company is just not true,” 3M Chief Executive Officer Mike Roman told CNBC television in an interview on Friday.

3M said on Friday it has secured China’s approval to export to the U.S. 10 million N-95 respirators manufactured by the company in China.

(Reporting by Ankit Ajmera in Bengaluru; Editing by Devika Syamnath)

Trump says he will invoke wartime act to fight ‘enemy’ coronavirus

By Jeff Mason and Steve Holland

WASHINGTON (Reuters) – U.S. President Donald Trump moved on Wednesday to accelerate production of desperately needed medical equipment to battle the coronavirus pandemic and said an estimate that U.S. unemployment could conceivably reach 20 percent was a worst case scenario.

Scrambling to address the virus after initially playing it down, Trump said he is invoking the Defense Production Act, putting in place a law that will allow the U.S. government to speed production of masks, respirators, ventilators and other needed equipment.

“We’re going to defeat the invisible enemy,” said Trump, who said the unfolding crisis had basically made him a “war-time president.”

Trump said he would invoke another law that would allow U.S. authorities to turn back migrants seeking to cross the southern border of the United States illegally. The border will not be closed, he said.

“No, we’re not going to close it, but we are invoking a certain provision that will allow us great latitude as to what we do,” he said.

Trump has made staunching the flow of migrants across the border with Mexico a central pillar of his presidency and has poured billions of dollars into building a border wall that is far from completed.

Immigrant rights groups have slammed the idea of mass returns of foreign nationals to Mexico.

Trump said a hospital ship will be sent to hard-hit New York to help people affected by the contagion, and that a second hospital ship will be deployed on the West Coast.

He defended his description of the coronavirus as “the Chinese virus” despite concerns among some Americans that he was making an ethnic slur.

“It’s not racist, not at all. It comes from China,” he said of the illness, whose origin has been traced back to Wuhan, China.

Trump, appearing in the White House briefing room for what has now become a daily news conference with his coronavirus task force, said he would sign the Defense Production Act later on Wednesday.

The law, which dates back to the Korean War of the 1950s, grants the president broad authority to “expedite and expand the supply of resources from the U.S. industrial base to support military, energy, space, and homeland security programs,” according to a summary on the Federal Emergency Management Agency website.

Reuters was first to report last month that Trump’s action was being considered. (https://reut.rs/2U0TVqk)

“We will be invoking the Defense Production Act just in case we need it,” said Trump.

Treasury Secretary Steven Mnuchin fanned fears of economic collapse on Wednesday by telling lawmakers on Capitol Hill that 20 percent unemployment was an extreme possibility should the virus have devastating effects on American businesses, many of which are already under duress.

“That’s an absolute total worst case scenario,” said Trump. “We’re nowhere near it.”

Vice President Mike Pence, head of the coronavirus task force, urged all Americans to put off elective surgery to allow hospitals to concentrate on the rising influx of patients with the COVID-19 respiratory illness caused by the new virus.

Deborah Birx, a member of the task force, urged young people to adhere to government guidelines, calling for a 15-day effort to slow the spread of the virus. Young people are considered key transmitters of the virus, which can be passed along even with mild or no symptoms.

There are now more than 7,300 U.S. cases of the illness and at least 118 deaths.

(Reporting By Jeff Masonm, Steve Holland, Alexandra Alper, Doina Chiacu, Susan Heavey, Lisa Lambert; Editing by Bill Berkrot, Alistair Bell and Steve Orlofsky)

Exclusive: U.S. mulls using sweeping powers to ramp up production of coronavirus protective gear

By Ted Hesson and Alexandra Alper

WASHINGTON (Reuters) – President Donald Trump’s administration is considering invoking special powers through a law called the Defense Production Act to rapidly expand domestic manufacturing of protective masks and clothing to combat the coronavirus in the United States, two U.S. officials told Reuters.

The use of the law, passed by Congress in 1950 at the outset of the Korean War, would mark an escalation of the administration’s response to the outbreak. The virus first surfaced in China and has since spread to other countries including the United States.

U.S. health officials have told Americans to begin preparing for the spread of the virus in the United States.

The law grants the president the power to expand industrial production of key materials or products for national security and other reasons. The biggest producers of face masks in the United States include 3M Corp and Honeywell International Inc.

Trump, a Republican seeking re-election on Nov. 3, has faced criticism from Democrats over his administration’s response to the outbreak.

Health and Human Services (HHS) Secretary Alex Azar told lawmakers this week that the United States needs a stockpile of about 300 million N95 face masks – respiratory protective devices – for medical workers to combat the spread of the virus. The United States currently has only a fraction of that number available for immediate use, Azar testified.

During an interagency call on Wednesday, officials from HHS and the Department of Homeland Security (DHS) discussed the possibility of invoking the Defense Production Act for the manufacture of “personal protective equipment” that can be worn to prevent infection, according to a DHS official.

Such equipment can include masks, gloves and body suits.

Azar said at a congressional hearing on Wednesday that China controls “a lot of the raw materials as well as the manufacturing capacity” related to face masks.

“Very little of this stuff is apparently made in the (United) States, so if we’re down to domestic capability to produce, it could get tough,” the DHS official told Reuters.

A White House official confirmed that the administration was exploring the use of the law to spur manufacturing of protective gear. Both the DHS official and the White House requested anonymity to discuss the issue.

“Let’s say ‘Company A’ makes a multitude of respiratory masks but they spend 80% of their assembly lines on masks that painters wear and only 20% on the N95,” the White House official said. “We will have the ability to tell corporations, ‘No, you change your production line so it is now 80% of the N95 masks and 20% of the other.'”

“It allows you to basically direct things happening that need to get done,” the official added.

HHS declined to comment. DHS did not immediately respond to a request for comment.

‘VERY LOW’

Trump said on Wednesday the coronavirus risk to the United States remained “very low,” but that federal health officials were prepared to take action and that Vice President Mike Pence would take control of the U.S. response.

Chuck Schumer, the top Senate Democrat, on Thursday accused Trump of “towering and dangerous incompetence” and said the president “must get his act together” on the coronavirus threat.

Invoking the Defense Production Act is one of a number of options under consideration by the administration to combat the virus, the officials said, and no final decision has been made. Trump invoked the law in 2017 to address technological shortfalls in a vaccine production capability and other items such as microelectronics.

The law grants the president broad authority to “expedite and expand the supply of resources from the U.S. industrial base to support military, energy, space, and homeland security programs,” according to a summary on the Federal Emergency Management Agency website.

Azar testified on Wednesday that the United States has a stockpile of around 12 million of the N95 masks that are in line with certifications from the U.S. National Institute for Occupational Safety and Health (NIOSH). HHS also has another 5 million N95 masks that are no longer NIOSH certified, Azar said, perhaps because they are past the expiration date.

In addition to those masks, the U.S. government has a stockpile of 30 million “gauze type” surgical masks, which the U.S. Centers for Disease Control and Prevention has said are less effective because they are loose-fitting.

Azar said the government needs a stockpile of approximately 300 million N95 masks.

U.S. Food and Drug Administration Commissioner Stephen Hahn said in a written statement on Thursday that the agency had heard reports of increased market demand for some types of protective medical gear and “supply challenges,” but was not aware of specific shortages.

CDC Director Robert Redfield testified at a House subcommittee on Thursday that he would ask ordinary Americans not to buy N95 masks at this time.

“There’s no role for these masks in the community,” he said. “These masks need to be prioritized for healthcare professionals.”

(Reporting by Ted Hesson and Alexandra Alper; Additional reporting by Michael Erman, Jeff Mason, Mike Stone and David Brunnstrom; Editing by Ross Colvin, Will Dunham and Daniel Wallis)