U.S. to bolster public health workforce to fight COVID-19, future pandemics

WASHINGTON (Reuters) – The Biden administration is releasing $7.4 billion to bolster the nation’s healthcare workforce amid the ongoing COVID-19 pandemic and to prepare for future epidemics and health challenges, the White House said in a statement on Thursday.

The funds, allocated as part of the $1.9 trillion aid package pushed by President Joe Biden and passed by Congress in March, will be used to recruit and hire a range of healthcare workers to help with vaccinations, testing and contact tracing, it said.

Of the $7.4 billion, $4.4 billion will go to states and local public health departments to address disease outbreaks and hire school nurses. It will also be used to expand the U.S. Centers for Disease Control and Prevention’s ability to track outbreaks and to create a service corps dedicated to public health. The remaining $3 billion will boost local public health workforces ahead of future challenges, with an emphasis on recruiting diverse candidates, the White House said.

The United States is making progress in its efforts to emerge from the coronavirus pandemic, which shut down much of the country last year and roiled the economy, with more than 582,000 deaths to date.

After a winter spike in COVID-19 infections, new cases have fallen for four straight weeks and deaths have also dropped as more than one-third of the country has been vaccinated. Warmer weather has also helped to curtain the spread of the virus.

Nearly 154 million people in the United States had received at least one dose of a COVID-19 vaccine as of Wednesday, U.S. officials said. The pace of vaccinations, however, has slowed and U.S. health officials have said variants such as the one emerging from India could still pose a threat.

Public health experts for years have decried a lack of funding for the CDC and other areas and have warned about the potential devastating impact from epidemics of SARS, Ebola, swine flu and other diseases.

(Reporting by Steve Holland and Susan Heavey; Editing by Paul Simao)

America’s mask makers face post-pandemic meltdown

By Timothy Aeppel

(Reuters) – The small U.S. manufacturers that rushed to produce face masks over the past year are now stuck with hundreds of millions of unsold face coverings because China is flooding the market with below-cost masks, and most may not survive the end of the pandemic.

That’s the thrust of a letter to President Joe Biden released Tuesday by a trade group representing 26 small manufacturers that set up production of the badly needed safety items as the health crisis took hold last year.

The manufacturers said over half their production would be forced offline in 60 days if they don’t get immediate federal aid, costing thousands of jobs. They blame low-priced imports, especially from China.

“We write to you with a request for immediate help against unfair trade practices by foreign nations that threaten the viability of the U.S. domestic PPE mask manufacturing industry, as well as future U.S. pandemic preparedness efforts,” the newly formed group, the American Mask Manufacturer’s Association, said in the letter.

The group said they have capacity to produce 3.7 billion surgical masks and more than 1 billion of the higher-protection N95 masks a year – and are now sitting on stockpiles of 260 million surgical masks in their warehouses that they are struggling to sell. Another 20 million N95s are also on factory shelves.

When masks were in short supply last year, prices surged. But prices have now crashed, and hospital administrators and others are shopping for the best prices in a market crowded with new offerings.

A box of 50 surgical masks which sold for more than $50 a year ago can be found for $5 now.

The trade group said while there are 3 to 6 cents in raw material in every surgical mask, imported Chinese surgical masks now sell for an average of 1 cent each. “China … is effectively dumping masks on the U.S. market at well below actual costs.”

“If this remains unchanged, 54% of our production will go offline in 60 days and 84.6% in less than a year,” the group said in the letter. The group said they’d created more than 7,800 U.S. jobs in the last year, but roughly a third of those have already been lost to production cuts.

PROTECTING PRODUCERS

The Biden administration has pledged to look at ways to support domestic producers of protective equipment – including potentially finding ways to subsidize U.S. producers – but the government reviews are still underway.

“The idea that everyone expressed during the crisis – that we need to avoid (PPE shortages) ever happening again – hasn’t changed profit-driven institutions,” said James Wyner, chief executive of Shawmut Corp., a West Bridgewater, Massachusetts, maker of engineered materials that expanded into mask production during the crisis. “The distributors are still sourcing their stuff at the lowest price.”

Wyner said he’s selling masks from his new production lines, but “substantially less than we would like.”

Adam Albrecht, senior quality control manager at Indiana Face Mask, another small producer, said when the firm first started producing the higher-filtration N95 masks last year, “People came out of the woodwork, saying: ‘We can sell this, we can sell this.’ But it seems no matter how much we adjust prices down, the Chinese stay just below.”

Some of the small mask makers are confident they will survive.

Dan Izhaky, who together with a partner has invested $4 million in a new mask factory outside Los Angeles, said the challenge is greater for makers of surgical masks, the ubiquitous safety masks that are relatively easy to make. Izhaky’s company makes more complex N95 masks and he said he has continued to expand. “But we also believe the Biden administration is going to take a number of steps down the road to really help us be sustainable,” he said.

The mask trade group – which doesn’t include industry giants such as 3M Co. and Honeywell International Inc. – urged the Biden administration to take immediate action to support the industry.

Their recommendations include requiring the federal government and any other institution receiving federal dollars for buying protective equipment to buy only U.S.-made masks that comply with government rules on domestic content and remove any masks in the federal stockpile that don’t meet federal standards. They also want the administration to require any hospital that accepts federal funds to earmark 40% of its spending on PPE for domestic producers by 2023.

They are also asking the government to consider buying the 260 million masks now stockpiled at the new factories.

(Reporting by Timothy Aeppel; Editing by Dan Burns and Andrea Ricci)

Biden says unemployed offered jobs must take them or lose benefits

By Nandita Bose

WASHINGTON (Reuters) -U.S. President Joe Biden on Monday defended himself against critics who say expanded unemployment benefits offered in the COVID-19 relief bill passed in March are keeping Americans from taking new jobs.

Biden said the administration will remind U.S. states this week that any unemployed American offered a comparable job must take it or risk losing unemployment benefits. He is also directing the U.S. Labor Department to work with states to reinstate requirements that those receiving unemployment benefits must demonstrate they are actively looking for work.

“If you’re receiving unemployment benefits and you’re offered a suitable job, you can’t refuse that job and just keep getting unemployment benefits,” Biden said.

Republican lawmakers blamed a bad jobs report last week on the Democratic president’s decision to offer expanded unemployment benefits through August. Some Republican governors have scrapped the added benefits, directing the additional dollars elsewhere.

(Reporting By Nandita Bose and Jarrett RenshawEditing by Chizu Nomiyama and Howard Goller)

Biden: Jobs report shows “long way to go” in economic recovery

By Jeff Mason and Steve Holland

WASHINGTON (Reuters) -President Joe Biden on Friday predicted a “long way to go” for U.S. economic recovery from a pandemic-spurred slump and urged Washington to do more to help the American people after a disappointing jobs report.

U.S. job growth unexpectedly slowed in April, likely restrained by shortages of workers and raw materials.

Biden and his team have said his $1.9 trillion pandemic relief package, the Democratic president’s first major legislative accomplishment, is helping to bring the economy back from its pandemic plummet.

“Today’s report just underscores in my view how vital the actions we’re taking are,” Biden said in remarks at the White House. “Our efforts are starting to work. But the climb is steep and we still have a long way to go.”

The White House is pressing for trillions of dollars more in spending on infrastructure, education and other priorities. Republicans, however, object to the high price tag of Biden’s initiatives and critics have raised concerns about inflation and a disincentive, thanks to generous unemployment benefits, for people to return to the workforce.

The White House dismissed that criticism on Friday. Biden said he had not seen evidence that enhanced unemployment benefits were putting a drag on employment figures.

Jared Bernstein, a member of the president’s Council of Economic Advisers, told Reuters Biden’s COVID relief and stimulus package, known as the American Rescue Plan, had helped generate an average of more than half a million jobs per month over the last three months, April notwithstanding.

“Those are big numbers, and the fingerprints of the American Rescue Plan are all over those additions,” he said.

Bernstein said no course correction was required from the White House, a theme echoed by Nancy Pelosi, the Democratic speaker of the House of Representatives, who pressed for passage of Biden’s next legislative push.

“The disappointing April jobs report highlights the urgent need to pass President Biden’s American Jobs and Families Plans,” she said in a statement. “We need to take bold action to Build Back Better from this crisis by investing in our nation, our workers and our families.”

Republicans viewed it differently.

“Why is anyone surprised that the jobs reports fell short of expectations?,” said Republican Senator Marco Rubio of Florida on Twitter. “I told you weeks ago that in #Florida I hear from #smallbusinesses every day that they can’t hire people because the government is having them not go back to work.”

The share of Americans who are either working or looking for work rose last month, and the number of people who said they are not looking for jobs because of COVID-19 fell by 900,000 in April, Bernstein said, pushing back against criticism from some employers that the benefits had kept some people from returning to the workplace.

“Thus far, we don’t see a correlation between unemployment insurance benefits and lack of employment,” he said.

“What we do see is a lot of people who are still hesitant to go back to work because of safety concerns, care issues, schooling issues, and we’ll continue to watch this very closely.”

(Reporting By Jeff Mason and Steve Holland; additional reporting by Jonnelle Marte and Merdie Nzanga; Editing by Chizu Nomiyama, Andrea Ricci, William Maclean)

U.S. job growth far below expectations in April amid labor shortages

By Lucia Mutikani

WASHINGTON (Reuters) – U.S. employers hired far fewer workers than expected in April, likely frustrated by labor shortages, leaving them scrambling to meet booming demand as the economy reopens amid rapidly improving public health and massive financial help from the government.

Nonfarm payrolls increased by only 266,000 jobs last month after rising by 770,000 in March, the Labor Department said in its closely watched employment report on Friday.

Economists polled by Reuters had forecast payrolls advancing by 978,000 jobs.

The jobs report, the first since the White House’s $1.9 trillion COVID-19 pandemic rescue package was approved in March, will probably do little to change expectations that the economy entered the second quarter with strong momentum and was on track for its best performance this year in almost four decades.

Twelve months ago, the economy purged a record 20.679 million jobs as it reeled from mandatory closures of nonessential businesses to slow the first wave of COVID-19 infections. New claims for unemployment benefits have dropped below 500,000 for the first-time since the pandemic started.

Americans over the age of 16 are now eligible to receive the COVID-19 vaccine, leading states like New York, New Jersey and Connecticut to lift most of their coronavirus capacity restrictions on businesses.

But the resulting burst in demand, which contributed to the economy’s 6.4% annualized growth pace in the first quarter, the second-fastest since the third quarter of 2003, has triggered shortages of labor and raw materials.

From manufacturing to restaurants, employers are scrambling for workers. A range of factors, including parents still at home caring for children, coronavirus-related retirements and generous unemployment checks, are blamed for the labor shortages. The moderate pace of hiring could last at least until September when the enhanced unemployment benefits run out.

The labor market remains supported by very accommodative fiscal and monetary policy. President Joe Biden plans to spend another $4 trillion on education and childcare, middle- and low-income families, infrastructure and jobs. The Federal Reserve has signaled it intends to leave its benchmark interest rate near zero and continue to pump money into the economy through bond purchases for a while.

The unemployment rate rose to 6.1% in April from 6.0% in March. The jobless rate has been understated by people misclassifying themselves as being “employed but absent from work.” Millions of Americans remain out of work and many have permanently lost jobs because of the pandemic.

(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama)

Biden willing to accept 25% corporate tax rate to fund spending programs

By Trevor Hunnicutt

LAKE CHARLES, La. (Reuters) -U.S. President Joe Biden said a corporate tax rate between 25% and 28% could help pay for badly needed infrastructure, suggesting he could accept a lower rate than what he has proposed in his search for Republican support for the funding.

“The way I can pay for this, is making sure that the largest companies don’t pay zero, and reducing the (2017 corporate) tax cut to between 25 and 28 percent, Biden said during a visit to Lake Charles, Louisiana.

In his $2.3 trillion infrastructure plan, the Democratic president initially proposed raising the corporate tax rate from 21% to 28%. Tax experts and congressional aides told Reuters in April that a 25% rate would be a likely compromise.

“What I’m proposing is badly needed” and will be paid for, Biden said.

“Trickle-down ain’t working very well,” he said, referring to the theory that helping businesses and the wealthy will benefit those further down the economic ladder. “We’ve got to build from the bottom up and the middle out.”

The U.S. corporate tax rate dropped to 21% from 35% after the 2017 tax cut pushed by then-President Donald Trump and his fellow Republicans, but many big U.S. companies pay much less.

Increasing what companies pay into the more than $4 trillion federal budget is an important part of Biden’s plan to restructure the U.S. economy to reduce inequality and to try to counter China’s rise.

Biden’s stop in Lake Charles was part of his “Getting America Back on Track Tour” to promote a $2.25 trillion infrastructure spending plan and a $1.8 billion education and childcare proposal.

His push to spend more federal money on schools, roads, job training and other public works, and to tax the wealthiest Americans and companies to pay for it, is popular with voters of both parties. But the plans face stiff opposition from Republican lawmakers.

The White House is betting trips like this will build public support for Biden and his spending proposals, even among Republican voters who backed Trump, who continues to hold enormous sway over his party.

Congressional Republicans oppose Biden’s proposed $2.25 trillion in infrastructure spending over a decade, saying the higher taxes that would be levied on corporations to fund it would cost jobs and slow the economy.

The U.S. economy has boomed under higher levels of corporate taxation, such as the 1960s and the 1990s.

In the closely divided Senate, Biden would need every Democratic vote if no Republicans support the bill. Biden said in Lake Charles he was meeting with Republicans in Congress to see “how much they’re willing to go for, what they think are the priorities, and what compromises” they can offer.

“I’m ready to compromise,” Biden said. “I’m not ready to have another period where America has another ‘Infrastructure Month’ and doesn’t change a damn thing.”

Some Republicans have offered a far smaller package: $568 billion, focused on roads, bridges, broadband access and drinking water improvements. However, much of that reflects money the federal government is already expected to spend for that infrastructure.

U.S. Senate Minority Leader Mitch McConnell predicted last week that Biden’s infrastructure and jobs plan would not get support from Republican lawmakers.

“I’m going to fight them every step of the way, because I think this is the wrong prescription for America,” McConnell said in an event in his home state of Kentucky last month.

(Reporting by Trevor Hunnicutt, Jarrett Renshaw and Doina Chiacu; Writing by Steve Holland; Editing by Heather Timmons and Jonathan Oatis)

Drugmakers say Biden misguided over vaccine patent waiver

By Stephanie Nebehay and Ludwig Burger

GENEVA/FRANKFURT (Reuters) -Drugmakers on Thursday said U.S. President Joe Biden’s support for waiving patents of COVID-19 vaccines could disrupt a fragile supply chain and that rich countries should instead share more generously with the developing world.

Biden on Wednesday threw his support behind waiving intellectual property rights for COVID-19 vaccines, angering research-based pharmaceutical companies.

If adopted by the World Trade Organization, the proposal would invite new manufacturers that lack essential know-how and oversight from the inventors to crowd out established contractors, the International Federation of Pharmaceutical Manufacturers and Associations (IFPMA) said.

“I have heard many (vaccine makers) talking about ‘our resources are stretched, our technicians are stretched’,” IFPMA Director General Thomas Cueni told Reuters. He warned of a possible free for all if “sort of rogue companies” were allowed to become involved.

Vaccine developers echoed his comments that waiving intellectual property rights was not a solution.

“Patents are not the limiting factor for the production or supply of our vaccine. They would not increase the global production and supply of vaccine doses in the short and middle term,” said Germany’s BioNTech, which aims to supply up 3 billion doses together with Pfizer this year.

BioNTech said it took more than a decade to develop its vaccines manufacturing process and replicating it required experienced personnel and a meticulous technology transfer, among several other factors beyond patents.

Another German company CureVac, which hopes to release trial results on its messenger ribonucleic acid (mRNA) vaccine as early as this month, said patents were not to blame for supply bottlenecks.

“Since mRNA technology has emerged as the key technology in the fight against COVID-19, the world now needs the same raw materials in unfathomable amounts. The biggest problem is how to coordinate this,” a spokeswoman said.

IFPMA’s Cueni said the real bottlenecks were trade barriers, in particular the U.S. Defense Production Act (DPA).

The DPA is a decades-old U.S. law that prioritized procurement orders related to U.S. national defense, but it has been widely used in non-military crises, such as natural disasters.

Cueni said the way to kickstart low-income countries’ vaccination campaigns was for rich countries to donate vaccine, rather than widen eligibility to young and healthy people at home.

Moderna, which on Thursday reported quarterly results, said waiving intellectual property rights would not help to increase supply of its vaccines in 2021 and 2022.

The U.S. drugmaker said last year it would not enforce its vaccine patents. CureVac said on Thursday it would also not enforce its patents during the pandemic and that it knew of no other developer that would.

Italy’s ReiThera which is in late-stage tests on an experimental COVID-19 vaccine, was also critical of patent waivers.

“There is proprietary know-how that has to be transferred by the owner. And then there is the problem with process materials, which at the moment have delivery times of almost a year,” ReiThera’s chief of technology Stefano Colloca said.

In contrast to the industry reaction, the GAVI vaccine alliance, which co-leads the COVAX dose-sharing program with the WHO and faces major supply constraints, welcomed Biden’s support for waiving intellectual property rights.

(Writing by Ludwig BurgerAdditional Reporting by Emilio Parodi in Milan; editing by Barbara Lewis and Jane Merriman)

U.S. backs giving poorer countries access to COVID-19 vaccine patents, reversing stance

By Andrea Shalal, Jeff Mason and David Lawder

WASHINGTON (Reuters) -President Joe Biden on Wednesday threw his support behind waiving intellectual property rights for COVID-19 vaccines, bowing to mounting pressure from Democratic lawmakers and more than 100 other countries, but angering pharmaceutical companies.

Biden voiced his support for a waiver – a sharp reversal of the previous U.S. position – in remarks to reporters, followed swiftly by a statement from his top trade negotiator, Katherine Tai, who backed negotiations at the World Trade Organization.

“This is a global health crisis, and the extraordinary circumstances of the COVID-19 pandemic call for extraordinary measures,” Tai said in a statement, amid growing concern that big outbreaks in India could allow the rise of vaccine-resistant strains of the deadly virus, undermining a global recovery.

Shares in vaccine makers Moderna Inc and Novavax Inc dropped several percent in regular trade, although Pfizer Inc stock fell only slightly.

The head of the World Health Organization, Tedros Adhanom Ghebreyesus, called Biden’s move a “MONUMENTAL MOMENT IN THE FIGHT AGAINST #COVID19” on Twitter, and said it reflected “the wisdom and moral leadership of the United States.”

Pharmaceutical companies working on vaccines have reported sharp revenue and profit gains during the crisis. The industry’s biggest lobby group warned that Biden’s unprecedented step would undermine the companies’ response to the pandemic and compromise safety.

One industry source said U.S. companies would fight to ensure any waiver agreed upon was as narrow and limited as possible.

Robert W. Baird analyst Brian Skorney said he believed the waiver discussion amounted to grandstanding by the Biden administration and would not kick off a major change in patent law.

“I’m skeptical that it would have any sort of broader long- term impact across the industry,” he said.

Biden backed a waiver during the 2020 presidential campaign in which he also promised to re-engage with the world after four years of contentious relations between former President Donald Trump and U.S. allies. Biden has come under intensifying pressure to share U.S. vaccine supply and technology to fight the virus around the globe.

His decision comes amid a devastating outbreak in India, which accounted for 46% of the new COVID-19 cases recorded worldwide last week, and signs that the outbreak is spreading to Nepal, Sri Lanka and other neighbors.

NEGOTIATIONS TO TAKE TIME

Wednesday’s statement paved the way for what could be months of negotiations to hammer out a specific waiver plan. WTO decisions require a consensus of all 164 members.

Tai cautioned deliberations would take time but that the United States would also continue to push for increased production and distribution of vaccines – and raw materials needed to make them – around the world.

The United States and several other countries previously blocked negotiations at the WTO about a proposal led by India and South Africa to waive protections for some patents and technology and boost vaccine production in developing countries.

Critics of the waiver say producing COVID-19 vaccines is complex and setting up production at new facilities would divert resources from efforts to boost production at existing sites.

They say that pharmaceutical companies in rich and developing countries have already reached more than 200 technology transfer agreements to expand delivery of COVID-19 vaccines, a sign the current system is working.

The WTO meets again on Thursday, but it was not immediately clear if the U.S. decision would sway other opponents, including the European Union and Britain.

The U.S. government poured billions of dollars into research and advance purchases for COVID-19 vaccines last year when the shots were still in the early stages of development and it was unclear which, if any, would prove to be safe and effective at protecting against the virus.

Wednesday’s move allows Washington to be responsive to the demands of the political left and developing countries, while using WTO negotiations to narrow the scope of the waiver, said one source familiar with the deliberations. It also buys time to boost vaccine supplies through more conventional means.

Dr. Amesh Adalja, senior scholar at the Johns Hopkins Center for Health Security, said such a patent waiver “amounts to the expropriation of the property of the pharmaceutical companies whose innovation and financial investments made the development of COVID-19 vaccines possible in the first place.”

But proponents say the pharmaceutical companies would suffer only minor losses because any waiver would be temporary – and they would still be able to sell follow-on shots that could be required for years to come.

Pfizer said on Tuesday it expects COVID-19 vaccine sales of at least $26 billion this year and that demand for the shots from governments around the world fighting to halt the pandemic could contribute to its growth for years to come.

(Reporting by Andrea Shalal, Jeff Mason and David Lawder; Additional reporting by Steve Holland, Michael Erman, Patricia Zengerle and Stephanie Nebehay; Editing by Peter Cooney)

Biden to visit storm-battered Louisiana to tout infrastructure spending

By Jarrett Renshaw

(Reuters) – President Joe Biden on Thursday will visit the Gulf Coast state of Louisiana, which has backed Republicans in U.S. elections for the past two decades, to tout his plans to invest in water and storm projects in cities that have been battered by hurricanes.

Biden, a Democrat, will visit both the decidedly liberal-leaning city of New Orleans, still scarred 15 years after Hurricane Katrina, and deeply conservative Lake Charles, a city of 77,000 with a major refinery and petrochemical plants, which was slammed by Hurricanes Laura and Delta last year.

The visits are the latest stop in the White House’s “Getting America Back on Track Tour,” to promote Biden’s $2.25 trillion infrastructure spending plan and a $1.8 billion education and child-care proposal.

Biden’s push to spend more federal money on schools, roads, job training and other public-facing projects, and tax the wealthiest Americans and companies to pay for it, is popular with members of both parties. But the plans face stiff opposition from Republican lawmakers.

The White House is betting trips like this will build public support for Biden and his spending proposals, even among Republican voters who backed former President Donald Trump, who continues to hold enormous sway over his party.

Biden plans to tour one of New Orleans’ aging facilities that houses water purification equipment and turbines for drainage pumps, which help pump out water during storm events. “Storm-hardening” projects that invest in dams and levies are a potentially popular idea in a Gulf Coast state increasingly threatened with extreme weather that scientists blame on climate change.

Biden is asking Congress for $50 billion to improve the resiliency of infrastructure nationwide, and additional support to help areas recover from disaster.

Congressional Republicans oppose Biden’s proposed $2.25 trillion in infrastructure spending over a decade, saying the higher taxes that would be levied on corporations to fund it would cost jobs and slow the economy.

Some Republicans have offered a far smaller package, $568 billion, focused on roads, bridges, broadband access and drinking water improvements. However, much of that reflects money that the federal government is already expected to spend for that infrastructure.

U.S. Senate Minority Leader Mitch McConnell predicted last week that Biden’s infrastructure and jobs plan will not get support from Republican lawmakers.

“I’m going to fight them every step of the way, because I think this is the wrong prescription for America,” McConnell said in an event in his home state of Kentucky last month. In the closely divided Senate, Biden would need every Democratic vote if no Republicans support the bill.

Biden brushed off the comment on Wednesday when asked about it by reporters at the White House. He recalled that McConnell said something similar when former President Barack Obama was in office, but yet “I was able to get a lot done with him.”

(Reporting by Jarrett Renshaw; Editing by Heather Timmons and Leslie Adler)

Analysis-Biden poised to pivot U.S. arms deals toward security, human rights

By Mike Stone

WASHINGTON (Reuters) – Ninety minutes before President Joe Biden took office on January 20th, the United States signed a $23 billion dollar deal to sell F-35 jets, drones and advanced missiles to the United Arab Emirates.

It was part of flurry of last minute deals President Donald Trump had told Congress were coming in his last two months in office, forcing the Biden administration to make quick decisions on whether or not to stick with the geopolitically sensitive weapons sales.

To the surprise of some Democratic allies, Biden has so far kept the lion’s share of Trump’s more controversial agreements. Executives at five large defense contractors who requested anonymity to speak freely were also surprised by the speed of the Biden administration’s deliberations.

Longer-term, however, those executives and five more people in and around the administration told Reuters that Biden’s policy will shift to emphasize human rights over Trump’s more commercial approach to exporting military equipment.

Biden’s posture towards arms exports – specifically around reducing weapons used to attack others – could shift sales at Boeing Co, Raytheon Technologies Corp and Lockheed Martin Corp. That means fewer bullets, bombs and missiles, while security products like radars, surveillance equipment and defenses against attacks get the green light.

In an interview last week, Raytheon’s CFO Neil Mitchill said that offensive munitions exports, “going forward, the kinds of sales that we were talking about have been declining,” adding there has been a multi-year downward trend of offensive weapon sales to foreign customers.

Boeing and Lockheed declined to comment.

In the early days of the Biden administration, officials paused weapons sales to Middle East allies, including sales of Raytheon’s and Boeing-made precision guided munitions to Saudi Arabia.

Eventually a determination was made to only sell the Kingdom “defensive” arms, while limiting weapons that could be used to attack out of concern over casualties in Saudi Arabia’s war with Yemen.

Biden’s team ultimately decided to stick with the massive UAE deal. The move spurred criticism from the human rights group Amnesty International which immediately bashed the decision and drew complaints from lawmaker Robert Menendez, Chairman of the powerful Senate Foreign Relations Committee.

One former U.S. official familiar with the Biden transition team’s thinking noted that many aspects of the F-35 sale still need to be negotiated, giving them leverage as the Abraham Accords between UAE and Israel are implemented. The F-35 sale was a side deal to the accords.

PIVOT TO DEFENSE

But arms deals like Trump’s UAE agreement, and others with governments that have poor records on human rights records look far less likely from the Biden White House.

“While economic security will remain a factor” when reviewing weapons sales, the Biden Administration will “reprioritize” other factors including U.S. national security, human rights and nonproliferation, a U.S. official has told Reuters.

“I’m hopeful that as we hear statements that support human rights as being front and center in arms transfer deliberations, we’ll see that play out through actual decisions, and not just words,” Rachel Stohl, vice president at the Stimson Center in Washington said.

During the transition period from election day in November to Biden’s inauguration, Trump’s team sent notification of $31 billion of foreign arms sales to Congress. Congressional notifications occur for most foreign military sales before a contract can be signed to sell a weapon.

On average, foreign military sales under Trump amounted to $57.5 billion per year, versus an average of $53.9 billion per year for the eight years under his predecessor Barack Obama, in 2020 dollars, according to Bill Hartung, director of the Arms and Security Program at the Center for International Policy think tank.

Biden’s approval of several late-Trump deals will ease the political and diplomatic transition from one administration to another, according to a State Department official. In the case of the UAE deal, the official said, it helps the two nations “meet our mutual strategic objectives to build a stronger, interoperable, and more capable security partnership.”

As Lockheed’s CEO Jim Taiclet put it to Reuters late last year, “alliances are really important… Foreign Military Sales are part and parcel of that.”

The Biden administration inherited a backlog of more than 500 weapons export deals teed up by the Trump administration, one person briefed on the State Department’s backlog said.

Going forward, the Stimson Center’s Rachel Stohl said Biden’s State Department team is “looking at countries, at individual weapons systems, as well as individual sales.” But as more appointees take their posts at the State Department she said there could be a “paradigm shift on the way in which arms sales are considered as part of holistic efforts to develop and build partnerships and capacity.”

(Reporting by Mike Stone in Washington; editing by Chris Sanders and Edward Tobin)