In another reversal from his campaign rhetoric, President Donald Trump said in an interview Wednesday with The Wall Street Journal that he now supports the U.S. Export-Import Bank, calling it a “very good thing and it actually makes money.”
The two biggest beneficiaries of Trump’s reversal are Boeing Co. (NYSE: BA) and General Electric Co. (NYSE: GE). Both companies use the bank to guarantee loans to buyers of their most expensive products. Commercial airliners and power-generation turbines are not cheap.
Here’s how the president’s revelation came about as he explained it to the Journal:
I will tell you what, I was very much opposed to Ex-Im Bank, because I said what do we need that for IBM and for General Electric and all these — 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 it. And when other countries give it, we lose a tremendous amount of business. … You know, it actually could make a lot of money.
The Ex-Im Bank has been essentially out of business for nearly two years. The Congress refused to appoint two Obama nominees to the bank’s board, another board member resigned, and without new appointments, the remaining two members of the five-member board could not constitute a quorum. Without a quorum, the bank could not commit to any deal valued at more than $10 million. Congress also refused to change the quorum requirement.
In 2015 the bank authorized just $5 billion in new financing and posted a profit of $284 million. In 2014, the last year that the Ex-Im Bank was fully operational, financing topped $20 billion and profits totaled $675 million.
As for job creation, the bank’s annual report for 2016 claims 2014 financings supported nearly 165,000 U.S. jobs, compared with 52,000 jobs in 2015.
The Ex-Im Bank is often maligned as the “Bank of Boeing,” but about 90% of its 3,746 authorizations for guarantees, insurance and working capital in 2014 and $5.1 billion of its authorized funds went to U.S. small businesses. Boeing received $6.1 billion in guarantees in 2014.
In 2015 the bank authorized more than $2.6 billion in financing and insurance supporting American small businesses, about half the prior year’s total.
Even though the president may have softened on the Ex-Im Bank, he still needs to persuade congressional Republicans to support it. That may not be as easy to do as changing his own mind.