President Donald Trump plans to revive the hobbled Export-Import Bank of the United States, his office said, a victory for American manufacturers like Boeing and General Electric which have overseas customers that use the agency’s government-backed loans to purchase their products.
Trump first told the Wall Street Journal on Wednesday he would fill two vacancies on the agency’s five-member board that have prevented the bank from having a quorum and being able to act on loans over $10 million. Trump’s picks must gain approval from the Senate, which blocked nominees by former President Barack Obama.
Trump told the Journal that the bank benefits small businesses and creates jobs, a reversal of his earlier criticism of the bank being “featherbedding” for wealthy corporations.
Bank offers loans to foreign entities
The Export-Import Bank, an independent government agency, provides loans to foreign entities that enables them to purchase American-made goods. For example, it has been used by foreign airlines to purchase planes from Boeing and farmers in developing nations to acquire equipment.
The bank’s acting chairman, Charles “CJ” Hall, was not immediately available for comment.
The bank has become a popular target for conservatives, who have worked in Congress to kill the bank, arguing that it perpetuates cronyism and does little to create American jobs.
Trump’s about-face on the export bank comes after meeting on Tuesday with former Boeing Chief Executive Officer Jim McNerney, who left the company last year but oversaw the corporation’s aggressive lobbying effort in support of the bank in 2015.
Trump also met at the White House on Feb. 23 with GE CEO Jeff Immelt and Caterpillar Inc CEO Mark Sutton, both vocal supporters of the bank.
It is not known if they discussed the bank at those meetings.
Bank helps level playing field
Large American corporations that do significant amounts of exports say other countries have similar agencies and the export bank levels the playing field.
“This is an encouraging development on a key competitive issue for U.S manufacturers and their extensive supply chains,” Boeing spokeswoman Kate Bernard said in statement to Reuters.
The U.S. Chamber of Commerce and the National Association of Manufacturers, which includes companies like Ingersoll-Rand, United States Steel and Pfizer, cheered the move.
“Manufacturers are encouraged by President Trump’s vocal support for the bank,” said NAM Vice President of International Economic Affairs Linda Dempsey in a statement.
A 2015 fight to shutter the bank led by conservatives in Congress allowed the bank’s charter to expire for five months.
After overwhelming bipartisan support emerged to renew the bank’s charter, which is needed for it to operate, conservatives blocked nominees to the board, preventing it from financing large exports like aircraft and power turbines.
Groups work to shut down bank
Freedom Partners and Americans for Prosperity, two groups funded by the Republican donor Koch brothers, worked aggressively for years to kill the bank. Brothers Charles and David Koch have opposed the bank for what they call damaging interference into the free market by government.
Nathan Nascimento, Freedom Partners vice president of policy, called the bank on Wednesday “the epitome of what’s wrong with Washington.”
“Reopening the flood gates to Ex-Im’s corporate welfare is a bad deal for hardworking taxpayers and a bad deal for American businesses,” he said.
The Club for Growth, which spends heavily in electing conservative candidates and was one of the few groups to campaign against Trump during the Republican primary in 2016, also lamented the change in position.
“Ex-Im has a long history of cronyism and corruption that is well-known to many in the Trump Administration, and while we hoped it would be done away with, the administration now has taken on the almost impossible challenge of reforming a federal agency whose mission has been to pick winners and losers with taxpayer dollars,” spokesman Doug Sachtleben said in a statement to Reuters.