Trump argued during a press briefing yesterday that the mere threat of using the Korean-War-era law was enough to get businesses to act.
“We’re a country not based on nationalizing our business. Call a person over in Venezuela. Ask them how nationalization of their businesses worked out. Not too well,” Trump said.
Democratic leaders and governors of states especially hard hit by the COVID-19 have been asking Trump to do more amid shortages of needed supplies, equipment and virus tests.
“I’m calling on the federal government to nationalize the medical supply chain,” New York Gov. Andrew Cuomo said on Twitter yesterday. “The federal government should immediately use the Defense Production Act to order companies to make gowns, masks and gloves. Currently, states are competing against other states for supplies.”
Trump said the business community is already stepping up and responding. He mentioned 3M (NYSE:MMM) — which makes 1.1 billion N95 respirator masks annually, 400 million of them in the U.S. The Maplewood, Minn.–based manufacturing conglomerate said Friday that it would increase investments, mostly in the U.S., to boost production by nearly a third.
“They’re going to make tremendous products,” Trump said.
Trump’s examples also included Honeywell (NYSE:HON), which announced yesterday that it will expand operations at its Smithfield, R.I. eye protection products plant to also manufacture millions of N95 masks. Honeywell said the move will create at least 500 new jobs.
Under the Defense Production Act, Trump could direct the U.S. Departement of Health and Human Services to go to a medical device manufacturer and, for example, place a large order for ventilators. The law requires the manufacturer to treat the order as a top priority, fulfilling it before any commercial orders previously received
“We have the threat of doing it if we need it. We may have to use it along the supply chain in a minor way. But … we have a lot of things happening right now,” Trump said.