Trade issues

As domestic firms kept exporting lifesaving equipment elsewhere, the Trump administration kept putting barriers on similar imports.

According to Chad Bown, a senior researcher at the Peterson Institute for International Economics, the government continued placing tariffs on Chinese imports of many medical products into the U.S. even as the coronavirus reached our shores.

The Trump administration announced on March 10 and March 12 that they would relax those tariffs.

Bown called the move an acknowledgement that the administration’s trade policies were endangering public health. By the time they were relaxed, he said, tariffs already affected “nearly $5 billion of U.S. imports of medical goods from China, about 26% of all medical goods imported from all countries.”

A week later, Trump issued an executive order invoking the Defense Production Act that gives the federal government the power to force companies to produce medical equipment and fulfill needs related to national defense before any other contracts.

The language in the order also allows the administration to control distribution in civilian markets of “personal protective equipment and ventilators.” It’s not clear what the president will do with this authority.

Economists are now warning that countries are using protectionist trade policies such as export bans and tariffs in an effort to keep medical supplies in their countries, and that these could backfire for hospitals and health professionals who need the supplies.

A team at the University of St. Gallen in Switzerland said in a March 23 study that any tariffs on items will increase the prices that hospitals and health professionals pay for these products. The team recommended that governments reassess their restrictions to meet the social challenge of COVID-19.

Bown generally supports free trade as an economic policy, but he also said it will benefit the public health response. There is too much uncertainty, he said, about which parts of the world will be hit hard by the coronavirus to cut off any areas of the world from production.

“What the pandemic has revealed to the world is that nowhere is safe,” Bown said. “Keeping open to international trade right now, in a time of pandemic, gives you many, many more options about where you might be able to source this kind of material from.”

USA TODAY used the latest trade data published by the U.S. Census Bureau for the analysis and looked at each commodity’s trade value based on its Harmonized System Code, known as HS code. The HS codes for personal protective equipment and ventilators are from a reference document for COVID-19 medical supplies published by the World Customs Organization.