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Mask Maker 3M Responds to Defense Production Act Order

By Howard Smith – Apr 3, 2020 at 11:15AM

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The company warns that eliminating N95 mask exports could backfire for the United States.

Industrial conglomerate 3M (MMM -0.52%) responded today to the Trump administration's invoking the Defense Production Act (DPA), requiring the company to prioritize domestic orders for its N95 respirator masks. The company said that for several weeks it has been going "above and beyond" to manufacture N95 masks for the U.S. market.

In its statement, it said it has already been working with the administration to that end, and it looked forward to continue working with the Federal Emergency Management Agency. However, it criticized, the administration's request that 3M stop exporting masks produced in the U.S. to Canada and Latin America, saying that could have "significant humanitarian implications," as it is a critical supplier to healthcare workers in those markets. 

N95 respirator mask

Image source: Getty Images.

Possible retaliation

3M said that cutting off exports of N95 masks could cause other countries to respond in kind. If that were to happen, the company believes, the net amount of masks being made available in the U.S. could actually decrease, the opposite of what the DPA is trying to accomplish. It noted that earlier this week it got permission from China to export 10 million N95 masks to the U.S. that were manufactured in China by 3M. 

3M also responded to reports of its N95 masks being resold by dealers and possible price gouging. It noted that this type of activity is both "unethical and illegal" and said that it is working with the U.S. Attorney General and others, "making it clear that 3M has not and will not raise prices for respirators and offering our assistance in the fight."

Howard Smith has no position in any of the stocks mentioned. The Motley Fool recommends 3M. The Motley Fool has a disclosure policy.

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