President Trump invoked the Defence Production Act on Wednesday, giving the administration expanded powers to direct factories to produce face masks, gowns, gloves and other medical supplies needed to fight the virus.

He also said that Fema was activated at Level 1, the highest level, across the US.

In a briefing on Wednesday, Trump said he was set to sign the act within hours, “just in case we need it”.

A federal government plan to combat the coronavirus, which was shared with the New York Times on Tuesday, warned that shortages of medical supplies like protective gear and pharmaceuticals could occur, “impacting health care, emergency services, and other elements of critical infrastructure”. Hospitals around the country have been warning of critical shortages of supplies.

Members of Congress have been calling for the move for several weeks. But some business leaders have argued against invoking the act, saying that factories already stand ready to help the government, and that the move could impose red tape on companies precisely when they need flexibility to respond dramatically and quickly to production challenges.

The White House is asking Congress to allocate $500 billion for two separate waves of direct payments to American taxpayers in the coming weeks and another $300 billion to help small businesses continue to meet payroll, according to a treasury department proposal circulating on Capitol Hill and among lobbyists.

The outline, a copy of which was obtained by The New York Times, calls for a total of $1 trillion in spending for those programmes, which would also include $50 billion for secured loans for the airline industry, and another $150 billion for secured loans or loan guarantees for other parts of the economy hard hit by the unfolding financial crisis.

It would allow for the use of the Exchange Stabilisation Fund, an emergency reserve account that is usually used for intervening in currency markets, to cover those costs.

Two military hospital ships, called the USNS Comfort and USNS Mercy, were dispatched to New York City and to a location on the West Coast, officials said. The Comfort, essentially a floating hospital, has 1,000 beds with 80 of those dedicated to intensive care.

The Pentagon had been preparing for the deployment of the Comfort and at least one other ship in the navy’s hospital fleet to provide relief to overwhelmed hospital systems.

“We’ve already given orders to the navy,” secretary of defence Mark Esper told reporters on Tuesday, “to lean forward in terms of getting them ready to deploy”.

Esper said that the US military was “ready and capable” to defend the country.

He said the military had issued restrictions on international and domestic travel to all department of defence employees.

The President said that airlines would be first in line among existing industries clamouring to receive a bailout package as economic fallout from the coronavirus continues.