The Export-Import Bank’s Top Foreign Buyers

Ex-Im Bank advocates emphasize its importance to small businesses and economic growth. A new analysis of government data reveals that Ex-Im Bank’s top 10 overseas buyers are large corporations that primarily purchase exports from multinational conglomerates. Ex-Im Bank’s small business narrative is challenged by the fact that the buyers receiving the most subsidies are—like the exporters—major corporations.

In lobbying for reauthorization of the Export-Import Bank of the United States (Ex-Im Bank), advocates emphasize its importance to small businesses and economic growth. As they tell it, taxpayer subsidies to foreign firms for the purchase of American exports grow Main Street businesses and create jobs. But the reality is quite different. A new analysis of government data reveals that Ex-Im Bank’s top 10 overseas buyers1 are large corporations that primarily purchase exports from multinational conglomerates. Furthermore, the subsidies lavished on these foreign firms actually undercut American companies and workers that must compete without such government assistance. 

The numerous problems with Ex-Im Bank have been analyzed in a significant body of research.2 For instance, previous research has documented that Ex-Im Bank financing principally benefits very large exporters.3 This new analysis reveals that the primary beneficiaries on the buyer side of the transactions are also very large firms. Among the top 10 buyers, 5 are state-controlled and rake in millions of dollars from their own governments in addition to Ex-Im Bank subsidies. These multiple-subsidy streams offset operating costs, and provide a significant competitive advantage over unsubsidized US firms engaged in similar ventures. 

Five of the top 10 buyers are involved in the exploration, development, and production of oil or natural gas. These foreign concerns are collecting subsidies from American taxpayers at the same time that the Obama administration is restricting domestic oil and gas operations.4 Consequently, the federal government doubly disadvantages US energy firms—through Washington’s excessive regulation and Ex-Im Bank subsidies granted to US firms’ foreign competitors. 

The other five top buyers are airlines that collectively have received more than $15 billion in Ex-Im Bank subsidies in the past seven years solely to purchase products from Boeing—the single largest US beneficiary of Ex-Im Bank financing.5 The bank’s subsidization of foreign airlines has tripled since 2008, significantly increasing competitive pressure on domestic carriers.6 In reality, Ex-Im Bank subsidies are a form of corporate welfare that is neither necessary nor appropriate.7 If lawmakers truly want to nurture small businesses and economic growth, they should end the Ex-Im Bank favoritism that undermines domestic companies and focus instead on reducing the tax and regulatory barriers that choke investment, innovation, and job creation.8 


The Export-Import Bank was incorporated in 1934 by President Franklin D. Roosevelt to finance trade with the Soviet Union. Congress later constituted the bank as an independent agency under the Export-Import Bank Act of 1945. The most recent authorization of the Ex-Im Bank was set to expire on September 30, 2014, but lawmakers extended the charter until June 30, 2015.9 

The bank provides loans and loan guarantees as well as capital and credit insurance to “facilitate” US exports. The financing is backed by the “full faith and credit” of the US government, which means taxpayers are on the hook for losses that bank reserves fail to cover. Ex-Im Bank’s current exposure exceeds $140 billion. 

President Roosevelt’s executive order authorizing the bank called for “remov[ing] obstacles to the free flow of interstate and foreign commerce” and “promoting the fullest possible utilization of the present productive capaci- ties of industries.”10 In decades past, political and economic turmoil around the world did present barriers to international trade. But successive rounds of global trade negotiations, starting with the first General Agreement on Tariffs and Trade in 1947, and culminating in the establishment of the World Trade Organization in 1995, have secured massive lowering of such barriers. When Ex-Im Bank was created in 1934, the average tariff on dutiable imports was 46.7 percent. Now, it is below 5 percent.11 

Not surprisingly, international trade has boomed as global trade barriers have shrunk. American businesses have benefitted from this, exporting $2.35 trillion worth of goods and services in 2014, hitting a record high for the fifth consecutive year.12 Ex-Im Bank plays a marginal role, assisting in only 2 percent of total US exports. The export picture would look almost the same without Ex-Im Bank because export credit subsidies only rearrange the distribution of exports, rather than raising the net level of exports overall.13

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