A little-known, high-impact U.S. agency — the Export-Import Bank — has been unable to do its job for U.S. workers and exporters since July 2015. The result? Forty deals worth $30 billion of U.S. manufactured exports are languishing until additional directors are appointed to the Bank’s Board, restoring a quorum and allowing the Bank to approve transactions more than $10 million in size.
For those who have never heard of it, Ex-Im Bank provides financing for U.S. export sales when private market alternatives don’t exist, as is the case for deals in many of the world’s most promising growth markets. International buyers who use the Bank pay fees and interest for these services, generating more than $3.8 billion in profit for American taxpayers since 2009. Over the past 10 years, export sales financed through Ex-Im Bank have supported more than 1.7 million U.S. jobs. Without its support, many U.S. exporters and the companies constituting their supply chains are hindered in their ability to compete and win in a fierce global marketplace.
While Ex-Im Bank supports many great U.S. manufacturers across a wide spectrum of noble industries, I’m focused on aerospace; it’s the No. 1 market for my company, Click Bond, headquartered in Carson City. Our products are proudly designed and manufactured by our 30-year-old company, which was founded by my parents. Click Bond now employs more than 400 smart and energetic Americans in Nevada and Connecticut. But our customers’ ability to compete and win on a level playing field around the world directly affects our ability to pioneer, grow, and manufacture here in the U.S.
Aerospace manufacturing is also one of the greatest economic engines for job creation in the United States, and it makes no sense to impair the performance of this critical sector that contributes so much to our national strength. The Aerospace Industries Association reports in 2016, the U.S. aerospace and defense industry generated $146 billion in exports and a trade surplus of $90 billion, the largest of any sector.
A bipartisan supermajority in both the House and the Senate reauthorized the Bank’s operations in late 2015. But, exporters that depend on the Bank watched in disappointment as the promise of a fully-functioning Ex-Im vanished when the number of Board members remained below the required minimum.
Ex-Im critics celebrated this weakening of the Bank, which they call “corporate welfare,” suggesting that only large corporations benefit from its support; nothing could be farther from the truth. The public needs to know every Ex-Im backed aerospace sale enables the sale of the output of the thousands of small- and mid-sized U.S. manufacturers that back up the major corporate nameplate on the sides of those products.
I like to call our companies “invisible exporters” because, while our products and services may be obscured from public view, their critical content contributions are no less important. Each Textron, Gulfstream, or Boeing aircraft or satellite contains thousands of high-value parts from thousands of proud American manufacturers. Many of them are small, family-owned companies like Click Bond.
Congress and the Administration should be seeking ways to assist the aerospace sector without distorting and damaging market health. The Export-Import Bank accomplishes this in its role as part of a multi-national system of export credit agencies operating under well-established rules. For the U.S. to shackle Ex-Im Bank is equivalent to unilateral commercial disarmament in the international marketplace, as foreign nations continue to provide loan guarantees in support of their home-team exporters. The result: U.S. manufacturers and suppliers will continue losing ground, and experience permanent damage to their global market position.
President Trump speaks forcefully to the value of getting the best deal for America. Addressing the U.S. debt and trade deficit while ensuring U.S. manufacturers have a level playing field are top priorities tied to this sentiment.
It’s therefore essential for the Administration to accelerate the process of identifying and putting forward nominees for the Ex-Im Bank’s Board of Directors and for Congress to expeditiously review and confirm these nominees.
Karl Hutter, president and CEO of Click Bond, Inc.