U.S. markets closed

3M, Trump Strike Deal To Import 166.5M Masks From China, Company To Continue To Supply Abroad

Neer Varshney

President Donald Trump's administration and 3M Co. (NYSE: MMM) on Monday reached an agreement to ramp up mask supply in the United States while letting the company continue to sell abroad.

What Happened

As part of the deal, the Minnesota-based veteran mask maker will import 166.5 million masks from its China manufacturing facilities by June. These will supplement the 35 million N95 respirators 3M already manufactures in the U.S.

The company will also continue to sell masks in other countries, including Canada and Latin American countries.

"I want to thank President Trump and the Administration for their leadership and collaboration," 3M chairman and CEO Mike Roman said in a statement.

"We share the same goals of providing much-needed respirators to Americans across our country and combating criminals who seek to take advantage of the current crisis."

3M also said it plans to increase the production of masks globally in the coming months. In the U.S., it expects to produce the N95 masks at a rate of 50 million per month by June, a 40% increase over the current manufacturing level.

Why It Matters

Trump imposed the Defense Production Act against the company last week.

"3M will have a big price to pay," the president said, as a Florida Division of Emergency Management Jared Moskowitz said that 3M was prioritizing selling to other countries over meeting domestic demand.

The company warned of "significant humanitarian implications" of banning the exports of masks at this time. 3M said the governments of other countries were likely to retaliate by banning masks exports from their country to the U.S.

There's a widespread shortage of masks both in the U.S. and globally. Apple Inc. (NASDAQ: AAPL) CEO Tim Cook, on Sunday, said the consumer electronics company had sourced 20 million masks to be distributed among the healthcare workers in the country.

Price Action

3M shares closed 5.16% higher at $140.70 on Monday. The shares were up 1.85% at $143.30 in the after-hours session.

See more from Benzinga

© 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.