In April, as the global pandemic really began to ramp up in the U.S., China quietly nationalized (seized) manufacturing plants that had previously been supplying the world with N95 filter masks. Overnight, hospitals, first responders, police, and military and government officials were unable to find them anywhere as the Chinese government took over factories once owned by private companies including global powerhouse 3M. The move has been a lesson for consumers in the West that these once cheap products that undercut domestic producers come with a steep price: the realization that the Chinese cannot be trusted and will close their borders and take care of their own first.
“All of our orders, for millions of N95 masks, were canceled last week,” Leo Friedman, CEO of iPromo in Chicago, told Forbes magazine.
Friedman’s company had been importing tens of millions of masks for the past two months, but, overnight, his orders were just cancelled and there is no recourse, no one to complain to.
“They were for hospitals and state governments,” he said. “We told them that we can’t get them.”
The N95 is a disposable face mask worn by doctors and some craftsmen. They fit tightly around the face and provide a solid defense against airborne pathogens, blocking up to 95% of tiny particles up to one micron in size. Hospitals and police departments began a frantic search for these masks as they provided the only way for healthcare workers to avoid inhaling SARS-CoV-2, the virus that causes Covid-19.
For years, the Chinese had been flooding the world with cheap filter masks and other personal protective equipment. Since China manipulates its currency, it is easy for manufacturers there to be able to underprice and undercut domestic producers, forcing them out of business.
Whether it was surgical masks, N95s, hospital gowns, or even medications, the Chinese dominated the market, selling a box of masks for a dollar or less. The one U.S. producer, Texasbased Prestige Ameritech, that did compete with the Chinese, was careful about what they produced, as the price quoted by the Chinese didn’t even cover the company’s labor costs.
Mike Bowen, the executive vice president of Prestige Ameritech, testified before Congress, saying, “China sells a box of masks for a dollar. I sell them for about $5.” He added that he feels like, right now, he’s chasing pennies to China.
Bowen told the House Energy and Commerce Subcommittee on Health that, for the past 13 years, he has been warning U.S. officials that the day was coming when China would cut off the supply of cheap products to the U.S., and the U.S. citizens who need them the most will suffer.
In the past 15 years, Bowen said surgical mask manufacturing has lost 4,000 jobs and has come totally under foreign control. With the global pandemic, he’s hoping that will change.