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I think it's worth considering that this isn't just any particular customer or individual -- it's a state government.

I don't think private businesses should be obligated to work with any government for any reason.

Where is the line? The defense production act?

I think that'd be a ripe thing for SCOTUS to determine (though, I personally don't trust them to determine much right now, so ymmv)

There's probably a good argument that the government should have to invoke eminent domain and proceed with manufacturing themselves.

I can't say that I've put an excess of thought into the matter, though.