In a week of surprising White House policy reversals, one that should excite trade-dependent Washingtonians is the president’s embrace of the Export-Import Bank.
In an interview Wednesday with the Wall Street Journal, President Donald Trump said he’s learned a lot about the bank and how it boosts trade and helps a variety of businesses.
Boeing CEO Dennis Muilenburg was the president’s chief tutor, the Wall Street Journal reported.
At first, Trump was opposed, wondering why large companies such as General Electric, IBM and Boeing would need this financial service. But he was told how many small businesses service those companies.
Indeed, about 90 percent of the more than 2,300 Ex-Im transactions in fiscal year 2016 directly benefited suppliers and other vendors, according to the National Association of Manufacturers.
Trump also learned that about 60 other countries have such a tool, and it would put U.S. businesses at a trade disadvantage if Ex-Im were scrapped.
“It’s a very good thing, and it actually makes money. You know, it actually could make a lot of money,” Trump said in the article.
None of this is news to manufacturers and other exporters. The virtues of Ex-Im have been extolled extensively, and the bank had been reauthorized 16 times without controversy since its founding in 1945.
The bank provides loans and guarantees so foreign buyers can quickly get American products, and American companies can avoid risks associated with overseas deals. Conventional banks often shy away from loans to foreign entities.
But in 2014, tea-party Republicans tagged the bank with the “crony capitalism” label and said it ran the risk of losing money – something it had never done. In fact, the federally chartered bank returned $675 million to the U.S. Treasury in 2014 and helped sustain 164,000 jobs. The year before, it returned more than $1 billion.
Oddly, many of the same politicians are silent when it comes the Farm Bill and its subsidies for agricultural businesses in their districts.
Nonetheless, the bank’s charter expired in July 2015 when key legislators bottled up reauthorization. But business groups were able to pressure the House to move a reauthorization measure to the floor three months later. It ultimately passed by large margins in both chambers.
But the politics didn’t end there. Alabama Sen. Richard Shelby, then-chairman of the Senate Finance Committee, blocked confirmation votes for vacant seats on the bank’s board of directors. Without a quorum, the board has not been able to authorize loans for more than $10 million.
As a result, transaction volumes have plummeted. Even still, the bank returned $284 million in fiscal year 2016.
The hope now is that the president can persuade Congress to fill those vacancies on the Ex-Im board, and make this international trade tool great again.
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