WOODLEY PARK — President Trump's nationalist, mercantalist, brash style has little in common with the self-described "Davos Crowd," at the Export-Import Bank Annual Conference. But the opening remarks at the conference sure had some echoes of Trump's adverserial stance towards China.
"The China Challenge" was a theme of the conference's opening remarks, delivered by CJ Hall, acting chairman and president of Ex-Im, a federal agency that subsidizes U.S. exports by extending taxpayer-backed financing to foreign buyers.
Hall put up slides showing how China was issuing far more government export finance than the U.S. Another slide, with a more compressed Y axis, showed the drop-off in Ex-Im financing, and Hall quipped about why China's subsidies weren't on the chart: "the red line would be somewhere above the penthouse" of the D.C., hotel hosting the conference.
Ex-Im has slowed its slow of export subsidies because it was out of business for a few months in 2015 when its authorization lapsed, and the agency hasn't been able to issue finance packages greater than $10 million ever since because the board lacks a quorum.
"How should the United States respond to the China Challenge?" Hall asked. "The United States needs to restore the Ex-Im Bank to full functionality."
Hall's argument is that the U.S. needs to up its subsidies to compete with China's subsidies. It's ultimately a nationalistic frame, not a globalist frame: The U.S. vs. China.
It's also bad economics. China harms its economy with its massive export subsidies.
Here's the findings by two top European economists:
Ultimately, as a consequence of the use of pure exporter subsidies, Chinese consumers are faced with higher prices while foreign consumers reap the benefits of cheaper subsidised goods. Our evidence suggests that by stopping this type of trade policy, China stands to experience a 3% gain in real income....
But Trump has often spoken as Hall does — and as Hall's predecessor Fred Hochberg spoke — as if China was somehow beating us by outsubsidizing us. Instead, China was helping U.S. consumers and hurting Chinese consumers.
And the U.S. sure helps China by subsidizing them. The No. 1 recipient of Ex-Im financing is the government of China. One Ex-Im recipient is the state-owned Industrial and Commercial Bank of China, the largest bank in the world (and a tenant at Trump Tower, in fact).
So it's an odd way to "beat China" by matching China's self-destructive behavior with subsidies to China.
Timothy P. Carney, The Washington Examiner's commentary editor, can be contacted at firstname.lastname@example.org. His column appears Tuesday nights on washingtonexaminer.com.