As Coronavirus Spreads, U.S. Looks to New Tools to Fight Fallout

Date: Thursday, March 19, 2020
Source: The Wall Street Journal

Trump invokes Defense Production Act, Senate passes relief bill as confirmed cases surpass 200,000 world-wide; stock market plummets

The U.S. escalated its response to the coronavirus pandemic as growing shutdowns increased fears of economic fallout, pushing the stock market to levels not seen since 2017.

The Dow Jones Industrial Average fell below 20,000 Wednesday—a demonstrable turn amid market turmoil as companies and investors prepared for a lengthy economic stall. President Trump said Wednesday the White House would be invoking the Defense Production Act, “just in case we need it.” That act, first passed during the Korean War, gives the president powers to require and incentivize businesses to produce goods tied to national defense.

Hospitals are facing a shortage of masks, gowns and other equipment needed to care for patients. The U.S. Air Force flew about 500,000 test kits from Italy to Memphis this week, said Gen. David Goldfein, chief of staff for the Air Force. Vice President Mike Pence called on Americans to postpone elective surgeries, and the administration said it would release guidelines discouraging nonessential procedures.

Meanwhile, the Senate passed the House’s coronavirus relief bill, which will provide free testing and require smaller employers to give two weeks of paid sick leave.

Mr. Trump said the administration is looking into developing a swab test for the new coronavirus. The White House had considered issuing an executive order that would expand the use of investigational drugs against the virus, The Wall Street Journal reported, but scientists with the Food and Drug Administration warned it could pose unneeded risks to patients.

Speaking to reporters, Mr. Trump compared the effort against the virus to fighting a war. “I view it in a sense, a wartime president,” he said. “That’s what we’re fighting. It’s a very tough situation.”

There are now more than 214,800 confirmed cases globally of the disease known as Covid-19, with infections outside of mainland China—where the epidemic began—now above 133,792, according to data compiled by Johns Hopkins University on Wednesday.

Fatalities have more than doubled during the past two weeks to 8,732. The number of deaths in Europe overtook those in China for the first time, cementing the continent’s position as the new epicenter of the pandemic. Italy, thesecond worst-hit country after China, has seen infections top 35,713 and deaths jump by more than 400 in a day to a total of 2,978, according to the country’s public health department.

The U.S. on Wednesday had 7,769 confirmed cases in all 50 states and Washington, D.C., including 118 deaths. Case numbers are expected to grow as testing capabilities expand.

The government also moved to further tighten travel restrictions, with Mr. Trump announcing plans to close its northern border with Canada to nonessential traffic. The president said the decision was made by “mutual consent.”

Canadian Prime Minister Justin Trudeau said Wednesday his government is working with the U.S. so the restrictions can come into effect “very quickly.” Trade and commerce will continue between the two countries. Canada on Monday banned most nonresidents from entering the country, although it made an exception for U.S. citizens.

Mr. Trump said he is planning new restrictions on the southern border, “probably today.” While he said he wouldn’t fully close the border, he promised a provision “that will allow us great latitude as to what we do.”

U.S. Immigration and Customs Enforcement said it would limit arrests of people in the country without legal authorization to those who pose a public safety risk or have been convicted of serious crimes until the public-health crisis abates.

Immigration authorities also said they would not conduct operations near health-care facilities except in extraordinary circumstances, so people don’t fear getting necessary treatment.

The change effectively returns ICE to Obama-era policies that the Trump administration had abandoned in an effort to more aggressively deter illegal immigration.

The Census Bureau suspended field work on the 2020 census until April 1 to protect census workers and help slow the spread of the virus. Door-to-door distribution is focused in rural and tribal areas where residents don’t receive mail at home. About 95% of households will receive their forms in the mail.

States and local officials also took more aggressive measures to promote social distancing in recent days, closing restaurants, bars and nonessential businesses.

Officials in San Francisco and the Bay Area ordered residents to stay home for three weeks, and the city of Hoboken, N.J., imposed a self-isolation policy. New York City Mayor Bill de Blasio said he is weighing whether to require residents to shelter in place, while New York Gov. Andrew Cuomo said he didn’t intend to impose such a quarantine.

New York state has 2,495 infections as of Wednesday afternoon, more than double the next closest state, Washington, with 1,014, Johns Hopkins said.

New York City officials were working to potentially convert entire hotels, among other venues, into hospitals to treat patients without Covid-19 as the city looks to expand its facilities. Mr. Cuomo said a hospital ship with 1,000 rooms from the federal government would help treatment.

Mr. Trump said the U.S. is preparing two hospital ships in case they are needed to respond to the novel coronavirus.

As more social-distancing guidelines are put in place, employers are cutting shifts, suspending work and starting to lay off workers across the country. Unite Here, a labor union that represents more than 300,000 people working in hospitality, entertainment and transportation in the U.S. and Canada, said Wednesday it expects 80% to 90% of its workers to be laid off.

Many economists say it is looking more likely that there will be a global recession.Deutsche Bank AG said gross domestic product could shrink 24% in the eurozone and 13% in the U.S. in the second quarter on an annual, seasonally adjusted basis—declines that would be the biggest in recorded history.

In an effort to cushion households and businesses amid the economic slowdown, the Trump administration is proposing two rounds of direct payments to Americans totaling $500 billion as part of a potential $1 trillion stimulus package, according to a Treasury Department memo viewed by the Journal. The Department of Housing and Urban Development, meanwhile, will suspend all foreclosures and evictions until the end of April, Mr. Trump said.

The World Bank and International Finance Corp. said late Tuesday they would fast-track as much as $14 billion in financing to assist companies and countries in their efforts to prevent, detect and respond to the rapid spread of Covid-19. Bank of England Gov. Andrew Bailey said the central bank was prepared to take further action to support the economy through the coronavirus emergency.

The spread of the virus should slow in the coming weeks as measures imposed by authorities take effect, said Meru Sheel, an infectious-diseases epidemiologist and research fellow at Australian National University in Canberra. “Individual behavior is going to be crucial to this.”

French authorities mobilized the army on Wednesday to transfer patients from one hospital to another. France has enough beds to deal with the 2,500 infected patients currently hospitalized. But in some regions, local hospitals have been overwhelmed by the sudden increase in the number of cases, with infections now totaling 9,052.

China sent about a million masks and other medical equipment to France on Wednesday, French Foreign Minister Jean-Yves Le Drian said.

In a sharp change of tack, the British government Wednesday ordered all schools to shut as of Friday afternoon until further notice.British Prime Minister Boris Johnson hinted that further actions will soon be presented to try to curb the spread of the novel coronavirus, which has so far claimed 104 lives in the country.

With hundreds of millions of people practicing social distancing and undergoing quarantines for 14-day periods, health authorities world-wide are hoping that infection rates will drop like they have in China and South Korea.

Outside Asia, however, authorities have had difficulties enforcing the latest confinement rules.

In Iran, with 17,361 people infected, according to government figures, state media showed busy traffic on the highways leading out of Tehran ahead of the Persian New Year despite the government urging people to stay at home.


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