WASHINGTON—The Trump administration is moving to bring back to life a long-hobbled agency that smooths export deals between U.S. manufacturers and overseas buyers, potentially ending a three-year freeze that has held up more than $40 billion of export deals.
The White House is expected to soon nominate Kimberly Reed to fill the top position at the U.S. Export-Import Bank. Ms. Reed would follow the administration’s prior nominee, former congressman Scott Garrett, who was rejected by a Senate committee in December.
Ms. Reed’s nomination would be a victory for the business-friendly faction of the GOP and for large U.S. manufacturers such asBoeing Co. and General Electric Co. Such companies rely on the agency to complete export deals and successfully opposed Mr. Garrett.
By turning to Ms. Reed, a former Treasury Department staffer during the George W. Bush administration, the White House is backing a nominee for the bank who thinks the Ex-Im Bank’s role is essential for the U.S. to counter foreign governments that operate their own export-finance agencies. At her nomination hearing late last year for a less-senior post at the bank, she said not having a functional export-finance agency amounted to “unilateral disarmament.”
A person familiar with the matter said Ms. Reed discussed the bank’s top role with Mr. Trump, meeting privately with him at his Mar-a-Lago resort in late 2017.
Ms. Reed declined to comment.
“By restoring the Export-Import Bank’s board quorum, EXIM will be able to help level the playing field,” Jeffrey Gerrish, the Ex-Im Bank’s acting president, said in a written statement.
The Ex-Im Bank helps support U.S. exports through a range of programs, including guaranteeing loans to foreign buyers, credit insurance and some direct lending to foreign companies.
Some Republicans think what it does amounts to corporate welfare, saying the bank puts taxpayers at risk of losing money to finance sales that should be left to the private sector. “Someone suggesting that they can’t do business without the taxpayer subsidy of the Ex-Im Bank is just [saying] that they’re not able to compete,” Sen. Pat Toomey (R., Pa.) said in an interview.
Lawmakers have fought over the agency for several years. In 2015, conservative opponents in Congress blocked the Ex-Im Bank’s ability to conduct business for several months. More recently, Senate Republicans haven’t filled empty board seats, effectively rendering it dormant.
Ms. Reed may face opposition from conservative Republicans who voted against her to be vice president of the agency when a Senate panel rejected Mr. Garrett in December. Although she cleared the committee at the time, senators will have to hold a new vote on her nomination to be president.
Three additional nominees for the bank’s board are awaiting Senate confirmation. The agency has been effectively dormant since July 2015, lacking a board quorum needed to approve transactions above $10 million. Ms. Reed’s ascension would only partially put the agency back in business. To get to a quorum, the Senate also needs to confirm at least two additional board members.
The bank’s inability to conduct business was on display in February, when its then-acting head flew to Kuwait to sign a $3 billion agreement pledging to help Iraq rebuild areas liberated from Islamic State.
Behind the scenes, representatives from top U.S. manufacturers such as GE vented that Washington’s inability to fully staff the bank’s board meant the agency couldn’t follow through on its commitment because many of the transactions were above the $10 million threshold.
“It’s toothless,” one GE executive said of the deal to Scott Schloegel, the acting chief of the bank, according to Mr. Schloegel.
Supporters, including lawmakers from both parties, say the bank keeps U.S. firms on a level playing field against foreign competitors that get similar support from their governments. They say foreign competitors are exploiting the bank’s protracted shutdown to strengthen their position at the bargaining table.
Most export credit agencies, including the Ex-Im Bank, require production and jobs for deals they finance to be located in their respective countries. As a result, deals that would have been sourced domestically are moving overseas, where companies can still obtain export assistance.
Some $2 billion of heavy industrial equipment that Egyptian Carbon Holdings Ltd. had planned to source in Texas, Pennsylvania and 34 other states is instead being manufactured in Canada and Europe—regions where the firm was able to obtain export-credit assistance for a massive petrochemical plant it is constructing near the Suez Canal, according to its chief executive, Basil El-Baz.
El Al Israel Airlines Ltd. outfitted its recent order of Boeing 787 Dreamliner jets with British-built Rolls-Royce engines, gaining access to British export-credit assistance. That assistance helped the airline finance its entire order of the American-built passenger jets, but it meant their engines were manufactured by a British firm in England instead of by GE in Ohio.
Guillermo Rapaport, the executive vice president of Amer-Con Corp., said his firm recently signed a $400 million contract to supply heavy trucks and other equipment to Angola, but the absence of a fully functioning Ex-Im Bank has placed the contract in peril.
“The reality is Ex-Im Bank opponents are picking winners and losers in the global marketplace, and right now they are actively choosing the foreign companies with access to export credit over the American workers, U.S. exports and manufacturing jobs,” said Tim Keating, Boeing’s executive vice president of government operations.
Write to Andrew Ackerman at [email protected]