WASHINGTON (Reuters Breakingviews) - The romance between Donald Trump and his conservative allies may founder over the future of the Export-Import Bank once he takes office. The president-elect's "America First" approach to industrial policy should be good news for the government credit agency that finances foreign purchases of U.S. goods. But it has been hobbled by Republicans who deride it as corporate welfare.
For years, it was routine for Congress to reauthorize the charter for Ex-Im Bank every five years. In 2014, some Republicans led by Congressman Jeb Hensarling, a potential Treasury secretary until the job went to Steven Mnuchin, started a campaign against Ex-Im as a symbol of crony capitalism. He said the bank only benefited industry giants like Boeing and General Electric, which didn't need government aid. Without lawmaker approval in 2015, the bank shut down for five months.
It reopened in December 2015 but has been unable to approve loans of more than $10 million because it lacks a full board, courtesy of Senate inaction on director nominees. The bank has 30-some loans totaling more than $20 billion waiting for approval. Help for small businesses actually makes up 90 percent of Ex-Im transactions and comprised 53 percent of total loans for 2016.
U.S. businesses have suffered because of it. In 2014, Ex-Im doled out $20.5 billion of financing to support $27.5 billion in U.S. exports and more than 164,000 American jobs, it says. In 2016, the bank says it provided $5 billion in financing, which supported $8 billion in exports and 52,000 jobs.
Meanwhile China's version of Ex-Im has overshadowed its Washington counterpart when it comes to loans. In 2015, China provided 10 times more export financing than the United States and that figure is growing. In just one deal in August, The Export-Import Bank of China signed a $17 billion agreement with China COSCO Shipping to help finance the construction of 50 ships.
During the campaign, Trump railed against China and the idea of an uneven global playing field. But by pressuring United Technologies to keep 1,000 workers at a Carrier plant in Indiana he showed he is more than willing to swap presidential scale-tipping for free-market principles when it suits. All Trump needs to do is pressure the Senate to approve one Ex-Im director, creating a board quorum. That will test the bona fides of his new GOP allies in Congress.