A U.S. agency that finances exports for American businesses and that conservative Republicans tried to kill has been given a new lease on life, after President Trump changed his position and backed it to compete with China.
Congress quietly renewed the U.S. Export-Import Bank for seven years, bundling its reauthorization into a federal spending package signed into law on Dec. 20, the date the bank's operating authority and funding for the government were set to expire.
Conservative Republicans tried to quash the bank as unnecessary and for much of the past four years constrained its operations by refusing to approve board members. The renewal ensures the 85-year-old agency will be able to provide loan guarantees, credit insurance and other support for U.S. companies to export goods and services.
Key to the turnaround was advocacy by Mr. Trump, who campaigned against the bank four years ago but then came to see it as a boost for U.S. manufacturers.
Sen. Kevin Cramer (R., N.D.), a bank supporter and an early backer of Mr. Trump, said the president told him in 2017 that he had dropped his opposition to the bank after learning from businesses "how important it is for global competition."
As the December deadline loomed, Mr. Cramer said he urged Mr. Trump to lobby Richard Shelby, (R., Ala.), a bank skeptic and chairman of the Senate Appropriations Committee, to fold the bank's reauthorization into the spending plan.
"The president wanted it. A lot of them wanted it," said Mr. Shelby. "I told him I had trouble with it, but I thought it was a foregone conclusion, and I was interested in bigger things."
That decision sealed the bank's renewal by tucking it into a large must-pass spending package--and depriving opponents of the agency of the opportunity to fight it through debate and an up-or-down vote on the renewal.
A White House spokesman declined to comment on Mr. Trump's changed position. The spokesman said that the renewal of the bank's operating authority "shows President Trump can deliver historic results" and ensures the U.S. economy "continues to grow and we compete globally."
Ex-Im Bank financing in the past helped big companies such as Boeing Co. sell planes and General Electric Co. export turbines. It has also helped smaller firms sell overseas.
Some Republican critics of the bank described it as "corporate welfare," saying it risks taxpayers' money to finance sales that should be left to the private sector.
Supporting the bank came to be seen by U.S. companies as more urgent as Mr. Trump sought to decrease the U.S. trade deficit and opened a trade war with China, according to agency officials and business lobbyists who advocated for the bank's renewal. Trump trade advisers, along with some Republicans and Democrats, argued that the bank was essential to keep U.S. companies competitive against foreign firms that receive help from their governments.
China ramped up its export assistance over the past decade or so to support Chinese companies securing resources and markets abroad. In recent years, it launched its Belt-and-Road infrastracture-building initiative, which helped drive its total official support for export and trade above more than $60 billion in 2018, according to an estimate in a June report by the U.S. Ex-Im Bank. China doesn't publish complete figures on how much it invests in Chinese businesses.
While money was flowing from Beijing, the Ex-Im Bank languished. The Senate didn't fill empty board seats. Democrats and some Republicans opposed Mr. Trump's first nominee to lead the agency, a former lawmaker who in office had called for shutting down the bank. When the nominee was rejected, other board positions went unapproved.
The bank's short-handedness meant it lacked a quorum needed to approve financing for deals of more than $10 million. Over nearly four years, approvals to support export deals totaling roughly $40 billion got held up and as much as $20 billion of additional deals may have shifted to countries where companies could obtain export assistance from credit agencies, according to people familiar with the bank's deal pipeline.
In fiscal year 2014, the bank's last full year with a quorum, it authorized some $20.5 billion in deals. That compared with $3.3 billion in fiscal 2018, when it couldn't approve large transactions because it lacked a quorum.
Kimberly Reed, an attorney and Mr. Trump's most recent nominee to lead the bank, saw Mr. Trump at his Virginia golf club in April and told him she was still awaiting confirmation, according to people familiar with the conversation.
Shortly afterward, she and two other individuals were confirmed, among the first batch of nominees to advance under new Senate rules that shorten debate on nominees to non-cabinet executive positions and district courts.
The confirmation of the trio in May restored the board's quorum, allowing it to once again approve larger transactions. Since then, the bank has finalized one large deal--an agreement to provide up to $5 billion for a liquefied natural gas project in Mozambique.
The project, run by French oil company Total SA, is expected to support some 16,400 U.S. jobs at suppliers in Texas, New York, Pennsylvania and other states, the bank said. It has the added benefit, according to the bank and people close to the project, of muscling aside financing from China, which had made a preliminary commitment to the project.
The bank "will not sit idly while China utilizes its tactics at the expense of America's workers," said Ms. Reed, the bank's president and chairman.
The state-run Export-Import Bank of China referred requests for comment to its media office, which didn't respond.
Opponents of Ex-Im Bank knew they faced an uphill fight over the past year. Republicans had lost the House. Democrats, joined by 13 Republicans, passed a bill in November to renew the bank for a decade. In the Senate, Sen. Kyrsten Sinema (D., Ariz.) had joined forces with Mr. Cramer, the North Dakota Republican, to rally co-sponsors for a bill to reauthorize the bank, also for 10 years.
At the same time, trade-war tensions had shifted perceptions. More lawmakers came to see the bank as a tool to facilitate exports and diminish the trade deficit--the view that Mr. Trump had come around to earlier. Proponents saw the must-pass spending legislation as a vehicle, and lawmakers settled on a seven-year deal after the White House signaled it favored a long-term authorization that wouldn't change the bank's powers.
In renewing the bank, Congress also took steps to ensure the agency would remain fully operational through 2026 even if the Senate again declines to confirm individuals tapped for its board seats. The authorization allows a temporary board to operate should the bank board lack a quorum.
"There's no question that conservatives got rolled on this," said Pennsylvania Sen. Pat Toomey, a longtime GOP opponent of the agency, who referred to last month's spending bill as a travesty.
"It's unbelievable that this would find its way in the dark of night into this bill that's not even being debated by the Senate, that's giving away its authority to control and have oversight over this board," Mr. Toomey said.
Andrew Duehren and Liyan Qi contributed to this article.
