The Export-Import Bank Levels the Playing Field for US Businesses | The Well News
Exports are critical to the American economy.
The U.S. Chamber of Commerce estimates that more than 41 million American jobs depend on trade. Of those jobs, approximately 11 million are directly impacted by exports. Manufacturing is particularly dependent on international trade. An estimated 45% of all goods produced in American factories will be exported to international markets.
Companies that export their products and services are incredibly valuable to the American economy. The International Trade Administration reported that, on average, these businesses “pay 18% more than non-exporting businesses,” are “70% more productive than non-exporting manufacturers,” and are “more resilient” during times of economic instability.
The ability for U.S. businesses to export opens new channels of commerce and creates increased financial opportunities, business growth, and the ability to hire and expand. International exporting also enhances risk and creates financial hurdles that small-to-medium sized companies struggle to overcome, particularly as they attempt to break into new markets.
That’s where the Export-Import Bank steps in.
EXIM is an independent federal agency that offers several financial services to American businesses that are unable to secure the financing they need from private banks. These services include export credit insurance, working capital guarantees and loan guarantees for foreign buyers.
These offerings are necessary for all businesses to succeed in global markets, but particularly for small-and-medium-sized businesses that don’t have the same level of fluid assets or insurance to support the high risks associated with operating internationally.
EXIM is often criticized for supporting “big business” or giant corporations, but that’s simply not the case. The majority of EXIM’s financial services — more than 95% — support small businesses and manufacturers. While EXIM certainly supports large American businesses and manufacturers, what is often overlooked is the vast supply chains that feed into those large companies. Each tier of suppliers that produce parts, systems and technologies for large-scale products benefits from the financial assistance EXIM provides to those large companies.
During my career, I oversaw the manufacturing of aerospace parts that were assembled into commercial and military aircraft destined for international sales. Parts were manufactured from all over the United States by manufacturers that ranged from strong-but-mighty mom and pop shops with 10 employees or fewer to medium-sized companies that employed anywhere between 100 and 200 workers. The financial assistance provided by EXIM leveled the playing field for the large American company to sell final products internationally. In turn, the profits were reinvested into the supply chain, helping to sustain existing jobs, create new jobs, and ensure long-term work for employees throughout the system.
The concept of EXIM isn’t new. In fact, most foreign companies receive financial support from their governments through programs like EXIM. It happens on a large scale across the globe. Without EXIM, American businesses simply can’t compete.
In 2023, the Office of Inspector General Export-Import Bank of the United States produced a report that analyzed and compared the effectiveness of EXIM against foreign export credit agencies. It found that overall, foreign ECAs were consistently more effective in providing financial support for their country’s businesses. A significant reason for this is because of the constant uncertainty of EXIM’s congressional authorization as well as “long-standing statutory and policy limitation.”
Despite its challenges, EXIM has been able to provide nearly $70 billion in support for more than 5,000 U.S. businesses and manufacturers. Data also shows that thanks to EXIM’s support, American companies have achieved more than $100 billion in total export sales.
Here in Oregon, nearly 90 state-based businesses have benefited from EXIM, 70 of which are small businesses. That investment translates to approximately $932 million in total export value. Imagine how much greater these statistics could be if Congress reauthorized EXIM and provided assurance that the bank’s future was secure.
A bill was recently introduced in the Senate that, if passed, would reauthorize EXIM for the next 10 years. This straight-forward decision would empower American businesses to compete and win in the international marketplace.
It would also strengthen the U.S. manufacturing sector, supply chains and our overall economic competitiveness globally.
Congress should consider this important piece of legislation as soon as possible to provide more certainty for small businesses that rely on overseas markets to grow.
If Congress wants to keep America winning, it needs to reauthorize the Export-Import Bank early this year.
Dave Hyem served as vice president for Boeing Fabrication and held leadership roles in engineering, operations and supply chains during his career. He can be found on LinkedIn.
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