What is Defence Production Act, 1950 invoked in the US?

US President Donald Trump invoked the Defence Production Act recently. The act has been invoked in order to direct General Motors, a Multinational Corporation to manufacture ventilators needed to fight COVID-19.

Highlights

The act was enacted in 1950 in response to Korean War. Under the act, President Truman established defence mobilization and also imposed price controls and regulated heavy industries.

In 2011, President Obama invoked the law to force the telecommunications industries to provide information related to the use of foreign-manufactured hardware and software in the networks of the companies.

Three Major Sections of the act

  • The act authorizes the president of the United States to make or even force a business to accept and prioritize contracts that are essential for defence of the country.
  • It authorizes the President to frame regulations, order to allocate services, materials and facilities that will promote defence of the country.
  • It also authorizes the President to force industries to expand production, impose price controls and control consumers to allocate raw materials to fulfill the needs of the country.

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