The bank that eases financing for American manufacturers engaged in global trade may soon resurface.
The White House is expected to nominate Kimberly Reed for president of the Export-Import Bank, according to reports from The Wall Street Journal.
For manufacturers, the benefits of the bank can be big. Instead of seeking up-front payment from foreign buyers for goods, the Ex-Im Bank provides financing, and because companies pay a fee for the bank’s services, the U.S. government makes money, too.
The bank’s authority lapsed in July 2015—which meant neither the bank nor its lenders could authorize new transactions. President Obama had been pushing for its reauthorization, stressing how vital a role the bank plays in the export of Made in USA product and maintaining a competitive advantage for U.S. exporters against their foreign counterparts. Obama signed legislation in December 2015 to revive the bank through 2019, but it’s been in more or less a holding pattern since then, as empty board seats went unfilled and there’s a necessary quorum for approving transactions above $10 million.
Opponents of the bank believe the lending is akin to “corporate welfare,” the Journal said, while those in favor feel its key for keeping a level playing field for U.S. companies.
Because the bank can’t currently approve transactions upward of $10 million, deals have already gone the way of foreign competitors where access to financing wasn’t an issue.
Egyptian Carbon Holdings Ltd. had planned to source around $2 billion worth of heavy industrial equipment in Texas and 35 other states, according to the Journal, but instead the company opted to manufacture in Canada and Europe where it was able to secure export-credit assistance.
Big companies like Boeing have also benefited from the Ex-Im Bank’s services, but the same lack of credit access led it to a British firm to manufacture its engines instead of GE for a recent order of 787 Dreamliner jets.
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“The reality is Ex-Im Bank opponents are picking winners and losers in the global marketplace, and right now they are actively choosing the foreign companies with access to export credit over the American workers, U.S. exports and manufacturing jobs,” Tim Keating, Boeing executive vice president of government operations, told the Journal.
Reed’s appointment would still be dependent on a vote—that’s expected soon—where she could face opposition from Republicans who voted against her for vice president in December, when the Senate committee also rejected Trump’s previous choice of Scott Garrett to lead the bank. And if she is appointed, the bank still wouldn’t be fully operational as it would require two more board members to meet quorum, according to the Journal.