The woman President Trump appointed to subsidize U.S. exports says she’ll go toe-to-toe with China. Kimberly Reed, the new president of the Export-Import Bank, said in a recent interview that part of her job is “to advance the comparative leadership of the United States with respect to China.”
But her agency has a long history (including a very recent history) of subsidizing Chinese manufacturers and Chinese state-owned companies that directly compete with U.S. companies.
The Ex-Im Bank, in the 18 months ending in December 2019, approved nearly $20 million in taxpayer-backed financing to Chinese companies. For instance, Yangzhou Rietech New Energy Science Technology Co., a Chinese semiconductor and solar panel manufacturer, has benefited from a $4.5 million insurance policy covered by U.S. taxpayers through the agency.
The Chinese manufacturer competes with U.S. manufacturers, and the Chinese government imposes tariffs on U.S. materials. So, U.S. taxpayers are subsidizing materials (which China taxes on import) to help Chinese manufacturers.
Dozens of Chinese factories have benefited from Ex-Im Bank financing in the last two years.
Over a longer time horizon, the single largest recipient of Ex-Im Bank financing is the communist Chinese government itself. The Industrial and Commercial Bank of China is a state-owned bank, and it’s the largest bank in the world. Regularly, America’s Ex-Im Bank subsidizes the ICBC when the ICBC is buying U.S. goods or financing purchases by other Chinese companies.
Our Ex-Im Bank sometimes even subsidizes China’s Ex-Im Bank. Our Ex-Im Bank sometimes subsidizes sales by Chinese state-owned companies to other Chinese state-owned companies.
There’s a more fundamental point to make here: You can’t beat China by imitating China. You beat China by being America and targeting specific bad Chinese actions with sanctions. Subsidizing Chinese buyers because China’s government is placing tariffs on our exports is lunacy.
