Restrictions on wearing masks in the United States have been relaxed, in a welcome development in the battle against Covid-19, but for many local companies that entered the mask industry last year, the good news has a downside. It is a catastrophic drop in sales.
Some of this slowdown in demand is linked to the relaxation of mask restrictions by the Centers for Disease Control and Prevention, but an industry expert says there is a bigger factor, the return of cheap protective gear from China, which flooded the US market early this year.
Industry officials and some members of Congress accused China of dumping, considering that the prices of many imports are valued very low, sometimes reaching one-tenth of the prices demanded by American factories for similar products, and that the chances of stability for local companies are few.
In recent weeks, at least 3 companies have stopped producing masks and medical clothing, while several other companies have significantly reduced production, among them Premium-PPE, a Virginia-based medical mask manufacturer, and its age. One year on the market, it laid off most of its 280 employees. “Our industry is currently in a fragile state,” said co-owner Brent Daily.
Like other startups, the company entered the masks market after China – the largest producer of medical protective equipment in the world – stopped exports at the beginning of the pandemic.
“Six months from now, not many of us will be in the market, and that won’t be good for the United States when there’s a national health emergency next,” Daley added.
The crisis faced by domestic producers is an urgent test for the Joe Biden administration, and its two top priorities are to support American manufacturing, and to ensure that health care workers never again scramble for proper protective gear. Health experts say this shortage likely contributed to high infection rates among frontline workers, as more than 3,600 of them died from Covid-19 in the first year of the pandemic, according to the Guardian and Kaiser Health News. Health News).
The White House has announced some measures aimed at supporting domestic producers of personal protective equipment, but industry officials say they are still waiting for more important trade policies and supply chain reforms that will boost their companies’ chances of survival.
White House COVID-19 Supply Coordinator Tim Manning said the administration has tried to address some of these industry challenges, pushing some federal agencies to buy local supplies and connecting start-ups to distribution giants that supply the nation’s hospital network. He added that the administration was ready in the coming months to allocate billions of dollars for federal relief expenditures that would fill the shortfall in the “national strategic stock” of products manufactured in America.
“The goal and scale of these efforts are still trying to deal with them,” Manning said in an interview.
In Congress, a bipartisan resolution would allocate $500 million in annual spending over the next three years to support domestic manufacture of biomedical devices.
While praising these steps, industry officials also say time is running out. The Federation of American Mask Manufacturers (a newly formed trade group) said that its 27 members have laid off 50% of the workforce. Without coordinated action from Washington, most of these companies will fail completely within the next two months.
An immediate support, they say, would be to repeal the Centers for Disease Control and Prevention’s guidance, passed during the pandemic, that forces health workers to repeatedly reuse N95 masks, even though they are designed to be disposed of after contact with each patient. Most hospitals are still implementing these directives, despite the presence of 260 million dust-covered masks in stores across the country.
Lloyd Armbrust, president of the association and founder and CEO of Armbrust American, a manufacturer of respirators in Texas, said: “We are looking for absolute support from the government. We need the government’s support now, because unfair pressure from China will kill this new industry even before lawmakers can tackle the problem.”
The union plans to file a complaint about unfair trade with the World Trade Organization, claiming that many of the protective tools imported from China are sold at less than production costs. Recently, the price of a number of surgical masks manufactured in China fell to less than one cent compared to 10 to 15 cents for American masks that use raw materials produced locally.
The US government must support us, because unfair pressure from China will kill this new industry even before lawmakers can tackle the problem.
Luis Arguelo Jr., Vice President of DemeTech, a medical thread company in Florida; I had to lay off one thousand and 500 workers at the beginning of this month who used to manufacture surgical masks; “This is a full-fledged economic war.”
He said that in the coming weeks – most likely – 500 employees who work in the manufacture of “N95” masks will also be laid off.
“China is on a mission to ensure that no one remains in this industry, and they are winning so far,” Argüello said.
The Chinese embassy in Washington did not respond to requests for comment.
The Department of International Trade, a division of the Ministry of Commerce, refused to say whether it would support a complaint about the anti-competition exercise against China. “The agency continues to closely monitor market trends and evaluate options to ensure that US manufacturers are competing on an equal footing,” a FCA spokesperson said in a statement.
The US Trade Representative’s office, which makes trade policy recommendations to the president, also did not respond to requests for an interview.