The National Association of Manufacturers took the unusual step July 11 of asking the Trump Administration to withdraw its nominee to run the Export-Import Bank of the United States.
Jay Timmons, CEO of the Washington-based NAM, said President Trump's choice to run the bank, former New Jersey Congressman Scott Garrett, has "a record of aggressively undermining the Ex-Im Bank [that] is tantamount to a vicious trade war against American manufacturing workers."
Garrett, while he was in Congress, voted to shut down the bank , saying it was a form of crony capitalism and amounted to using taxpayer dollars to favor certain business.
Some Republicans in Congress, and think tanks like the Mercatus Center at George Mason University, have argued that most of the benefits from the bank's financing go to large companies that would get it elsewhere, and that Ex-Im is involved in only about 2 percent of total U.S. exports.
But NAM and others say the bank helps level the playing field internationally for U.S. exporters, because other countries have much better financed export banks to help their domestic industries.
The Ex-Im Bank has been a political football. It shut down completely in 2015 for five months after Congress and the Obama Administration could not agree on legislation to renew it.
Since it restarted, it's not operated at 100 percent because it's lacked a full quorum of board members, who are approved by Congress, meaning that it's not been able to approve financing for deals larger than $10 million.
"While the Ex-Im Bank's board has been hobbled without a quorum, countries like China and Germany are devoting hundreds of billions of dollars to their official export credit agencies and inflicting long-lasting harm on the U.S. manufacturing base," Timmons said.
The bank is used by some plastics manufacturers — both machinery companies and processors — to provide credit insurance on some export orders, and I've spoken with some of them for a previous story.
It's creating a strange political dynamic in Washington.
President Trump in April said that he supported the Ex-Im Bank. It's a flip-flop — on the campaign trail, Trump sided with people like Garrett and opposed the bank, but once in office he changed his position and publicly endorsed Ex-Im.
But then a few days after those supportive comments, he nominated Garrett, a vocal opponent of the bank, to run the small institution.
OK. A little hard to make sense of the policy direction here.
Garrett's not spoken publicly but the bank's current chairman, Charles Hall, addressed that discrepancy in a speech to a Washington think tank July 6.
He noted that he would expect Garrett, being the nominee of the president, to line up with President Trump and support the bank.
But it seems the manufacturing and business community does not have that kind of trust. Local business groups are coming forward, echoing the NAM position.
The South Carolina Chamber of Commerce, for example, came out with a statement July 12 urging that state's two Senators to oppose Garrett.
The manufacturing community is being very public on this one.
NAM noted it had "enthusiastically" supported Trump initiatives on taxes, infrastructure and regulatory reform, but wanted the president to drop Garrett.
Hall, the bank's acting chairman, thinks not having an effective export credit agency hurts small manufacturers in the supply chains of big companies. That description certainly fits the plastics industry.
"What all this boils down to in my view is nothing less than an attack on the U.S. supply chain," Hall said.
In his July 6 speech at the Center for Strategic and International Studies, he said that the Ex-Im Bank has generated an $8 billion surplus in the last 20 years from its loans. That money is returned to the U.S. government.
A well-functioning government export bank can be a tool to help the U.S. manufacturing base, he said.
Hall was appointed by President Obama and will leave the agency when a new chairman is confirmed by the Senate.
"What we're seeing, and what we've seen particularly over the last two years as U.S. Ex-Im Bank has been forced to operate with one hand tied behind its back, is an increasing tendency on the part of our competing industrialized nations to try to steal a little bit of that supply chain," Hall said.