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How COVID‐19 Medical Supply Shortages Led to Extraordinary Trade and Industrial Policy

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  • Chad P. Bown

Abstract

Early in the COVID‐19 pandemic, a global shortage of hospital gowns, gloves, surgical masks, and respirators caused policymakers globally to panic. China increased imports and decreased exports of this personal protective equipment, removing supplies from world markets. Shortages led to European Union and US export controls as well as other extraordinary policy actions, including a US effort to reserve supplies manufactured in China by a US‐headquartered multinational. By April 2020, China's exports had mostly resumed, and over the rest of the year its export volumes surged. But China's export prices also skyrocketed and remained elevated through 2020, reflecting severe and continued shortages. This paper explores these and other government actions, such as US trade war tariffs and US industrial policy in the form of over $1 billion of subsidies to build out its domestic personal protective equipment supply chain, as well as potential lessons for future pandemic preparedness and international policy cooperation.

Suggested Citation

  • Chad P. Bown, 2022. "How COVID‐19 Medical Supply Shortages Led to Extraordinary Trade and Industrial Policy," Asian Economic Policy Review, Japan Center for Economic Research, vol. 17(1), pages 114-135, January.
    • Handle: RePEc:bla:asiapr:v:17:y:2022:i:1:p:114-135
    DOI: 10.1111/aepr.12359
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    References listed on IDEAS

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    1. Simon J. Evenett, 2020. "Chinese whispers: COVID-19, global supply chains in essential goods, and public policy," Journal of International Business Policy, Palgrave Macmillan, vol. 3(4), pages 408-429, December.
    2. Bown, Chad P., 2021. "The US–China trade war and Phase One agreement," Journal of Policy Modeling, Elsevier, vol. 43(4), pages 805-843.
    3. Fuchs, Andreas & Kaplan, Lennart & Kis-Katos, Krisztina & Schmidt, Sebastian S. & Turbanisch, Felix & Wang, Feicheng, 2020. "Mask wars: China's exports of medical goods in times of COVID-19," Kiel Working Papers 2161, Kiel Institute for the World Economy (IfW Kiel).
    4. Chad P. Bown, 2021. "The US–China trade war and phase one agreement," Working Paper Series WP21-2, Peterson Institute for International Economics.
    5. Gary Gereffi, 2020. "What does the COVID-19 pandemic teach us about global value chains? The case of medical supplies," Journal of International Business Policy, Palgrave Macmillan, vol. 3(3), pages 287-301, September.
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    Cited by:

    1. Raphael Lafrogne-Joussier & Julien Martin & Isabelle Mejean, 2023. "Supply Shocks in Supply Chains: Evidence from the Early Lockdown in China," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 71(1), pages 170-215, March.
    2. Takatoshi Ito & Kazumasa Iwata & Colin McKenzie & Haruko Noguchi & Shujiro Urata, 2022. "The COVID‐19 Pandemic and Asia: Editors' Overview," Asian Economic Policy Review, Japan Center for Economic Research, vol. 17(1), pages 1-17, January.
    3. Hiroshi Mukunoki, 2022. "Comment on “How COVID‐19 Medical Supply Shortages Led to Extraordinary Trade and Industrial Policy”," Asian Economic Policy Review, Japan Center for Economic Research, vol. 17(1), pages 138-139, January.
    4. Rebecca Freeman & Richard Baldwin, 2022. "Risks and Global Supply Chains: What We Know and What We Need to Know," Annual Review of Economics, Annual Reviews, vol. 14(1), pages 153-180, August.
    5. Anna Fuchs & Mateusz Szul & Agnieszka Dulska & Jakub Bodziony & Aleksandra Matonóg & Joanna Pilarska & Paulina Sieradzka & Rafał Stojko & Agnieszka Drosdzol-Cop, 2022. "The Impact of COVID-19 Pandemic on Female Sexual Function," IJERPH, MDPI, vol. 19(6), pages 1-9, March.
    6. Nadia Garcia‐Santaolalla & Kyle de Klerk, 2022. "Ensuring Market Supply Transparency for Personal Protective Equipment: Preparing for Future Pandemics," Global Policy, London School of Economics and Political Science, vol. 13(3), pages 401-411, June.
    7. Taiji Furusawa & Lili Yan Ing, . "G20’s Roles in Improving the Resilience of Supply Chains," Chapters,, Economic Research Institute for ASEAN and East Asia (ERIA).
    8. Benoit, Florence & Connell-Garcia, William & Herghelegiu, Cristina & Pasimeni, Paolo, 2022. "Detecting and Analysing Supply Chain Disruption," Single Market Economics Papers WP2022/1, Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs (European Commission), Chief Economist Team.
    9. Zhang, Jianghua & Long, Daniel Zhuoyu & Li, Yuchen, 2023. "A reliable emergency logistics network for COVID-19 considering the uncertain time-varying demands," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 172(C).
    10. Naudé, Wim & Tregenna, Fiona, 2023. "Africa's Industrialization Prospects: A Fresh Look," IZA Discussion Papers 16043, Institute of Labor Economics (IZA).

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    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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