Among his numerous policy reversals last week, one of President Trump’s most notable flip-flops for Washington residents involves the Export-Import Bank. With Washington relying upon international trade more than any other state, we are hopeful that Trump’s evolving position can convince naysayers in Congress of the bank’s importance.
“I was very much opposed to Ex-Im Bank because I said what do we need that for IBM and General Electric?” Trump told The Wall Street Journal. “It turns out that, first of all, lots of small companies will really be helped, the vendor companies. But also maybe more importantly, other countries give … we lose a tremendous amount of business.”
During last year’s campaign, Trump was quick to echo the mantra of congressional conservatives, who claim that the bank amounts to crony capitalism. We could say that it is unsurprising that Trump would stake out a position without understanding the issue, but we will attempt to withhold our snark. Instead, the important thing is that the president has landed on the right side of the issue. Fred P. Hochberg, who recently stepped down as chairman of the bank, said, “We ought to applaud people when they learn and they change their minds.”
The Export-Import Bank has been in existence since 1934, being reauthorized without controversy until recently. Tea Party Republicans have made it a cause celebre, claiming the bank chooses winners and losers among industries and risks losing money. The fact that the bank has always returned a profit for the federal Treasury — including more than $1 billion in 2013 — did not carry much weight.
Trump embraced these taking points during the campaign before seeing the light. According to the Wall Street Journal, Boeing CEO Dennis Muilenberg deserves credit for instructing him on how the bank works. “It’s a very good thing, and it actually makes money,” Trump told the Journal. “You know, it actually could make a lot of money.”
The Export-Import Bank provides loans and guarantees them so foreign buyers can purchase goods from American companies. Commercial banks frequently are reluctant to take the risk of dealing with foreign buyers, which means the existence of the bank is essential to large American manufacturers such as Boeing. Equally important, it is essential to small manufacturers, the kind who don’t have an automatic footprint on the global economy.
As Trump hinted, when Boeing lands a large overseas contract with help from the Ex-Im Bank, that benefits the thousands of small vendors who provide supplies or labor for the company — including hundreds in this state. And the fact that more than 50 other countries have their own version of a government-run bank to assist manufacturers should provide a clear signal that such banks are beneficial to the economy.
Far too many Republicans in Congress fail to recognize this, however. Congress allowed the bank’s charter to expire in July 2015; after pressure from business groups, it was reauthorized later that year. But the Senate Finance Committee has blocked confirmation votes to fill vacant seats on the board of directors, meaning the bank has been unable to authorize loans for more than $10 million. The Ex-Im Bank returned $284 million to the Treasury in 2016, a far cry from its previously robust windfall.
With Trump now supporting the Export-Import Bank, Congress should follow suit. Hundreds of Washington companies and thousands of Washington workers are depending upon it.
