A Flip-Flop on EXIM?
Last week was one of reversals for President Donald Trump. Within the space of 24 hours, he pivoted 180 degrees on four different issues.
Trump went from saying NATO was obsolete to “It’s no longer obsolete.” On the campaign trail, he vowed to label China a currency manipulator but last week he dropped that policy. Trump used to blast Federal Reserve chairwoman Janet Yellen for keeping interest rates too low, yet last week he told the Wall Street Journal, “I like her, I respect her,” and suggested he’s considering reappointing Yellen when her term expires next year.
Then there is the matter of the Export-Import Bank. “I don’t like it because I don’t think it’s necessary,” Trump told Bloomberg last August. “I think it’s a lot of excess baggage.” Last Wednesday, Trump called EXIM “a very good thing.”
“And it actually makes money,” he added. “It could make a lot of money.” And the president noted that it helps many small businesses.
Trump plans to revive EXIM by filling two vacancies on the agency’s five-member board. For over a year now, those vacancies have prevented the bank from approving loans over $10 million. Trump’s picks must be approved from the Senate, which refused to act on nominees by former President Barack Obama.
Big US exporters like Boeing, GE, and Caterpillar would be among those standing to benefit from the lifting of the loan ceiling. Trump’s reversal came a day after meeting with former Boeing CEO Jim McNerney, who spearheaded the company’s lobbying efforts in support of the bank in 2015.
EXIM works by providing loans to foreign buyers, enabling them to purchase US-made goods. Large US exporters say they need EXIM to level the playing field with foreign rivals that rely on similar agencies in their countries.
Conservatives in Congress have been working for the last few years to kill the bank, saying it corrupts free enterprise and does little to create jobs. In 2015, conservatives in Congress led a fight to close down EXIM, a move which saw the bank’s charter expire for five months. Bipartisan efforts ended up renewing the bank’s charter, but then conservatives blocked nominees to the board, preventing it from acting on larger deals.
Now that the president has spoken out in favor of EXIM, it’s interesting who he nominated to the post of board president. Scott Garrett, a former member of the House of Representatives from New Jersey, who lost his reelection bid in 2016, was a founding member of the Freedom Caucus and a fierce critic of EXIM. Also nominated for a board seat is another former congressman, Spencer Bachus of Alabama, who is known as a moderate.
When he was in Congress, Garrett called EXIM “a bank that embodies the corruption of the free enterprise system.”
It remains to seen how all this will play out. The president’s verbal change of policy was seemingly contradicted by the appointment of an EXIM foe to the position of board president, much as Trump nominated an anti-EPA activist as environmental protection administrator and an enemy of public education to the position of Secretary of Education.
As board president, Garrett could hobble EXIM’s ability to approve export financing deals. Trump’s words of support for EXIM will be of no use if its board is unable to act.