Global Stampede for Masks Spurs Calls to Resist Hoarding

(Bloomberg) --

They normally traverse the world with little fanfare, but they might just be the most important factor in the global market today, responsible for the health of people, for fragile financial markets and for even the sturdiest of economies. 

Surgical masks, an early line of defense against the spread of coronavirus, more recently have emerged as a new arena where countries are throwing up export barriers.

Citing reasons involving life and death rather than fears about protectionism, health experts are urging policy makers to let masks flow readily across national borders — with mixed success.

Germany sparked a diplomatic uproar with its neighbors after stopping a Swiss truck carrying 240,000 face masks. Switzerland and Austria are calling on Germany to lift the barriers partly because they both sit on Italy’s northern border, Europe’s virus hot spot.

“Industry and governments must act quickly to boost supply, ease export restrictions and put measures in place to stop speculation and hoarding,” Tedros Adhanom Ghebreyesus, the World Health Organization’s director general, said in a statement last week.

Days later, South Korea, Germany and Russia announced export bans of masks and other protective gear. They joined other nations or territories including India, Taiwan, Thailand and Kazakhstan that earlier put restrictions in place. The novel coronavirus has now spread to more than 113,000 cases globally and killed more than 3,900 people.

As Bloomberg News is reporting Tuesday, a global mask shortage may be about to get much worse.

“Everyone throwing up export bans isn’t going to solve the problem of how you will get the products in time to serve these acute needs,” Stephen Morrison, director of the Global Health Policy Center at the Center for Strategic and International Studies in Washington.

Before the epidemic, China produced about half of the world’s output of masks with daily production of about 20 million units, according to state media Xinhua.

The Trump administration last week granted exemptions from tariffs for a range of medical products imported from China, including face masks and medical gloves. It also comes at the same time as some White House officials are pushing to stockpile American supplies and shift supply chains out of China.

The U.S only has about 1% of the 3.5 billion masks it needs to combat a serious outbreak, Health and Human Services Secretary Alex Azar has said. The country plans to buy 500 million surgical masks and respirators for the national stockpile.

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Charting the Trade War

Since the Industrial Revolution began, every country that hasn’t been lucky enough to have huge oil deposits has gotten rich the same way: by getting good at manufacturing, according to Bloomberg Opinion’s Noah Smith. Economists argue that intentional promotion of manufacturing exports is crucial for this kind of development. A number of poor countries have been trying to put this idea into practice. Two prominent examples are Vietnam and Bangladesh, which have experienced exponential growth in recent years.

Today’s Must Reads

• Damage control | President Donald Trump, under pressure from business groups, is weighing measures to contain the fallout from the coronavirus and a sudden crash in oil prices.
• Double whammy | Just as China’s factories get back on their feet, a drop in demand from their biggest trading partners around the world is coming back to give them another hit.
• Tool belt | Orders for Japanese machine tools fell last month to the lowest level in seven years, signaling that already-weak manufacturing has taken another hit from the coronavirus.
• Oil shock | Saudi Arabia’s Crown Prince Mohammed bin Salman has just started an oil-price war. Winning it will come at a cost he might not be ready to pay for long.
• Water shortage | It’s deja vu for Morocco’s grain farmers, who are bracing for another dismal harvest as one of the worst droughts in decades withers crops.

Economic Analysis

• Adding stimulus | Officials can’t stop coronavirus from hitting Europe. But they can help it bounce back.
• Cheaper fuel | Lower oil prices can be a blessing and curse for freight markets.

Coming Up

• March 11: U.K. trade balance
• March 16: EU trade chief Phil Hogan speaks in Washington
• March 17: Japan trade balance

--With assistance from K Oanh Ha.

To contact the editor responsible for this story: Zoe Schneeweiss at zschneeweiss@bloomberg.net

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