The Export-Import Bank is an important topic of discussion for those in the manufacturing industry here in the United States. Only able to accept loans under $10 million, it has seriously hindered business for U.S. manufacturers. Companies like Boeing Co and General Electric Co began moving operations overseas to benefit from foreign governments Credit Agencies to secure financing. However, it looks as though President Donald Trump plans to revive the Ex-Im Bank to its former glory in a bid to further bolster American manufacturers global competitiveness.
On Wednesday (4/13/17), Trump told Wall Street Journal he would fill the vacancies on the agency’s five-member board. Without a full quorum the agency was held to a $10 million limit, much less than those needed by larger as well as small and medium sized American manufacturing company’s. Restoring the bank could go a long way to incentivize manufacturers to bring operations back within our borders.
For a little background, let’s take a closer look at the Export-Import Bank. The independent government agency provides loans to foreign entities looking to purchase American-made goods. Foreign companies can use the line or credit to make large purchases where private banks wouldn’t. Furthermore, the Export-Import Bank is one of the only federal agencies that actually turns a profit, benefiting taxpayers and the economy. Defaults on loans are incredibly rare and the agency can prove invaluable for small businesses looking to make big money on foreign markets.
The collapse of the Export-Import Bank left many small manufacturers wondering how they will compete on a global scale. Having access to a line of credit like the Export-Import Bank creates incentive for small manufacturers to grow and expand. A manufacturer reaching international markets and taking on more business will in turn need more employees to keep up with demand. Closing off the bank so it can only accept $10 million loans greatly limits its effectiveness.
President Trump’s willingness to revive the Export-Import Bank is a welcomed relief to large and small manufacturers alike. Only time will tell when or if the bank will be restored to its former glory however it’s encouraging that the Ex-Im Bank is being looked at more closely. For American manufacturers to compete on the global market, the United States needs to have a credit agency willing to support growing businesses.
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