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PolicyAnalysis

September 10, 2014 | Number 756

The Export-Import Bank


and Its Victims
Which Industries and States Bear the Brunt?
By Daniel Ikenson

EX EC U T I V E S UMMARY
he charter of the Export-Import Bank of
the United States is set to expire on September 30. Proponents of reauthorization
claim that by increasing exports and jobs,
Ex-Im benefits the U.S. economy. But in
that advocacy, the benefits are exaggerated and the costs
totally ignored.
The Banks skeptics speak of the opportunity costs
that arise when government attempts to allocate resources according to nonmarket criteria. They also note that
subsidies provided for the benefit of one exporter put
competing firms at an artificial disadvantage. In addition
to these opportunity and intra-industry costs, there is a
third set of significant costs that are too often forgotten:
the downstream industry cost.
Using official input-output tables and seven years of
Export-Import Bank transactions records, this analysis
estimates the downstream costs of Ex-Im subsidies that
are inflicted on manufacturing firms in every industry
across every U.S. state. These victims populate 189 of 237
manufacturing sub-industries and all 21 broad manufacturing industry categories identified under the North

American Industry Classification System, and they


incurred a net cost of $2.8 billion per year or $14.7 million
per sub-industry per year as a result of Ex-Im policies.
Among the specific sub-industry victims bearing the
largest costs are U.S. manufacturers of motor vehicle
bodies; computer storage devices; and, photographic and
photocopying equipment. The 5 broad manufacturing
industries incurring the greatest net costs are producers
of electrical equipment, appliances and components; furniture; food; nonmetallic mineral products; and, chemicals. These 5 most ill-affected manufacturing industries
account for 50 percent or more of manufacturing GDP
in 7 U.S. states, and the 10 largest victims account for twothirds or more of manufacturing GDP in 22 states.
In their efforts to win reauthorization from Congress,
supporters of the Export-Import Bank rely on exaggerated claims about the Banks benefits, while ignoring its
costs. Ex-Im policies reward some companies (in the short
run) and penalize many others in the process. These kinds
of data are often obscured or ignored, but they are essential to any informed judgments about the propriety and
efficacy of the Export-Import Bank.

Daniel Ikenson is director of the Cato Institutes Herbert A. Stiefel Center for Trade Policy Studies.

The main
purpose of
this analysis
is to expose
the unseen
costs, explain
that collateral
damage must
be taken into
account when
considering
the net effects
of the ExportImport Bank,
and show
which
industries and
states bear the
brunt of those
costs.

INTRODUCTION
The Export-Import Bank of the United
States is a government-run export credit agency, which provides special financing arrangements to facilitate sales between certain U.S.
companies and foreign customers. For several
months, Washington has been embroiled in a
debate over whether to reauthorize the Banks
charter, which will otherwise expire on September 30.
Reauthorization advocates contend that
Ex-Im fills a void left by private sector lenders
unwilling to finance certain riskier transactions and, by doing so, contributes importantly to U.S. export and job growth. Moreover,
rather than burdening taxpayers, the Bank
generates profits for the Treasury, helps small
businesses succeed abroad, encourages exports of green goods, contributes to development in sub-Saharan Africa, and helps level
the playing field for U.S. companies competing in export markets with foreign companies
supported by their own governments generous export financing programs. So whats not
to like about Ex-Im?
First, by dismissing the risk assessments
of private-sector, profit-maximizing financial
firms and making lending decisions based on
nonmarket criteria to pursue often opaque, political objectives, Ex-Im misallocates resources
and puts taxpayer dollars at risk. That Ex-Im
is currently self-financing and generating revenues is entirely beside the point. Ex-Ims
revenue stream depends on whether foreign
borrowers are willing and able to service their
loans, which is a function of global economic
conditions beyond the control of Ex-Im. Given
the large concentration of aircraft loans in its
portfolio, for example, Ex-Im is heavily exposed to the consequences of a decline in demand for air travel. Recall that Fannie Mae and
Freddie Mac also showed book profits for years
until the housing market suddenly crashed and
taxpayers were left holding the bag.
Second, even if taxpayers had tolerance
for such risk taking, the claim that Ex-Im exists to help small businesses is belied by the

fact that most of Ex-Ims loan portfolio value


is concentrated among a handful of large U.S.
companies. In 2013 roughly 75 percent of the
value of Ex-Im loans, guarantees, and insurance were granted on behalf of 10 large companies, including Boeing, General Electric, Dow
Chemical, Bechtel, and Caterpillar.1
Third, the notion that because Beijing,
Brasilia, and Brussels subsidize their exporters
Washington must, too, is a rationalization that
sweeps under the rug the fact that there are
dozens of criteria that feed into the ultimate
purchasing decision, including product quality,
price, producers reputation, local investment
and employment opportunities created by the
sale, warranties, after-market servicing, and
the extent to which the transaction contributes toward building a long-term relationship
between buyer and seller. To say that U.S. exporters need assistance with financing to level the playing field suggests that they lack advantages among the multitude of factors that
inform the purchasing decision. Moreover, if
the offer of cheap financing is the determining factor in these international transactions,
what is to stop a growing number of inefficient
low-quality producers from contesting these
markets with ever-increasing subsidies from
their own governments? U.S. companies and
the taxpayers that would support them would
be better off not competing for these markets
if the key to winning foreign customers is participating in an endless subsidies race.
Fourth, by trying to level the playing field
with foreign companies backed by their own
governments, Ex-Im unlevels the playing
field for many more U.S. companies competing at home and abroad. This adverse effect
has been ignored, downplayed, or mischaracterized, but the collateral damage is substantial and should be a central part of the story.
At the risk of giving short shrift to the multitude of other legitimate objections to Ex-Im
and its operationsmany of which have been
described and well-documented by current
and former policy scholars2the main purpose of this analysis is to expose the unseen
costs, explain that collateral damage must be

taken into account when considering the net


effects of the Export-Import Bank, and show
which industries and states bear the brunt of
those costs. After all is laid bare and a full and
proper accounting is taken, it will be clear that
Ex-Ims policies impose significant costs on
manufacturing firms across every industry and
in every U.S. state.

THE COSTS OF EX-IM FINANCING


When the Export-Import Bank provides
financing to a U.S. companys foreign customer
on terms more favorable than he can secure
elsewhere, it may be facilitating a transaction
that would not otherwise occur. That is the basis for Ex-Ims claim that it helps the U.S. economy by increasing exports and supporting
jobs.3 But that claim is questionable because
those resources might have created more value
or more jobs if deployed in the private sector
instead. If that were the case, Ex-Ims transaction imposes a net loss on the economy.
But suppose it could be demonstrated that
Ex-Im transactions grow the economy larger
or create more jobs than if those resources had
been deployed in the private sector instead.
Would Ex-Im then be correct in its claim? Not
necessarily. Further analysis is required.
Ex-Im financing helps two sets of companies (in the short-run): U.S. firms whose export
prices are subsidized by below market rate financing and the foreign firms who purchase
those subsidized exports. It stands to reason,
then, that those same transactions might impose costs on two different sets of companies:
competing U.S. firms in the same industry who
do not get Ex-Im backing, and U.S. firms in
downstream industries, whose foreign competition is now benefitting from reduced capital
costs courtesy of U.S. government subsidies.
While Ex-Im financing reduces the cost of
doing business for the lucky U.S. exporter and
reduces the cost of capital for his foreign customer, it hurts U.S. competitors of the U.S.
exporter, as well as U.S. competitors of his foreign customer by putting them at relative cost
disadvantages.

These effects are neither theoretical nor


difficult to comprehend. Yet proponents of
Ex-Im reauthorization rarely acknowledge, let
alone concede, that these are real costs pertinent to any legitimate net benefits calculation.
Instead, they speak only of the gross benefits
of export subsidies, which they consider to be
the value of exports supported by their authorizations.4
But there are at least three sets of costs that
are essential to determining the net benefits
of Ex-Im: (1) the Opportunity Cost, represented by the export growth that would have
obtained had Ex-Ims resources been deployed
in the private sector; (2) the Intra-Industry
Cost, represented by the relative cost disadvantage imposed on the other U.S. firms in the
same industry (the domestic competitors) as a
result of Ex-Ims subsidies to a particular firm
in the industry, and; (3) the Downstream Industry Cost, represented by the relative cost
disadvantage imposed on the U.S. competitors
of the subsidized foreign customer.
The Opportunity Cost is difficult to estimate. The what-would-have-happened counterfactual requires a variety of assumptions
about average economic variables and their
relationships, each with its own probability
of occurrence. The assumptions necessary to
generate such an estimate would significantly
influence its value. For the sake of not bogging
down the analysis in such detail or with contestable assumptions, suffice it to recognize
that opportunity costs exist. Indeed, opportunity costs always exist when there are foregone alternatives to the path chosen. But for
the sake of argument and the purpose of this
study, assume that the overall opportunity cost
of Ex-Im is $0. In other words, there will be no
attempt here to quantify the opportunity cost
of Ex-Im.
The Intra-Industry Cost is somewhat easier to calculate, in theory. If Ex-Im provides a
$50 million loan to a foreign farm equipment
manufacturer to purchase steel from U.S. Steel
Corporation, the transaction may benefit U.S.
Steel, but it hurts competitors like Nucor,
Steel Dynamics, AK Steel, and dozens of other

While ExIm financing


reduces the
cost of doing
business for
the lucky U.S.
exporter and
reduces the
cost of capital
for his foreign
customer, it
hurts U.S.
competitors
of the U.S.
exporter, as
well as U.S.
competitors
of his foreign
customer by
putting them
at relative cost
disadvantages.

Ex-Im helps
some U.S.
companies
increase their
exports sales.
But it
hinders
other U.S.
companies
efforts to
compete at
home and
abroad.

steel firms operating in the United States and


competing for the same customers at home
and abroad. The $50 million subsidy to U.S.
Steel is a cost to the other firms in the industry,
who can attribute a $50 million revenue gap
between them (aggregated) and U.S. steel to
a government intervention that picked a winner and made them, relatively speaking, losers.
The $50 million benefit for U.S. Steel is a $50
million cost to the other steel firms. But the
distortion is then compounded when taking
into consideration the dynamics that would
have played out had the best firmthe one
offering the most value for the best pricesecured that export deal instead. Reaching revenue targets, raising capital, and moving down
the production cost curve to generate lower
unit costs all become more difficult to achieve
on account of the original intervention, amplifying the adverse impact on other firms in the
industry. When government intervenes with
subsidies that tilt the playing field in favor of
a particular firm, it simultaneously penalizes
the other firms in the industry and changes the
competitive industry dynamics going forward.
Every Ex-Im transaction touted for boosting U.S. exports creates victims within the
same U.S. industry. Without Ex-Ims intervention, Nucor might have been able to win that
foreign farm equipment producers business,
which is a prospect that undermines the premise that Ex-Im boosts exports at all and reinforces the point that it merely shifts resources
around without creating value, and possibly
destroys it. What is given to U.S. steel is taken
from Nucor and the other firms, among whom
may be the more efficient producers. Considering only the intra-industry costs there is a
strong case to be made that the net benefits of
Ex-Im are at best $0.
But, again, for the sake of argument and the
purpose of this paper, assume that the benefits do equal the amount of Ex-Im subsidies
and that these transactions impose no costs
on other firms in the industry. In other words,
assume the intra-industry costs also equal $0.
The Downstream Industry costs are those
imposed by the transaction on the U.S. compa-

nies that compete with the foreign customer.


When a foreign farm machinery producer
purchases steel on credit at subsidized interest
rates, it obtains an advantage over its competitorsincluding its U.S. competitors. So, when
that subsidized rate comes courtesy of a U.S.
government program committed to increasing U.S. exports, it only seems reasonable to
consider the effects on firms in downstream
U.S. industries before claiming success. Has
the subsidy to the foreign farm machinery
producer made John Deere, Caterpillar, New
Holland, or other U.S. farm machinery producers less competitive? Has it hurt their bottom lines?
To give a live example, Delta Airlines has
been vocal in its objection to Ex-Im-facilitated sales of Boeing jetliners to foreign carriers,
such as Air India. Delta rightly complains that
the U.S. government, as a matter of policy, is
subsidizing Deltas foreign competition by reducing Air Indias cost of capital. That cost reduction enables Air India to offer lower prices
in its bid to compete for passengers, which has
a direct impact on Deltas bottom line. This
is a legitimate concern and it is not limited to
this example.
Consider the generic case. A U.S. supplier
sells to both U.S. and foreign customers. Those
customers compete in the same downstream
industry in the U.S. and foreign markets. ExIm is happy to provide financing to facilitate
the sale, as its mission is to increase exports
and create jobs. The U.S. supplier is thrilled
that Ex-Im is providing his foreign customer
with cheap credit because it spares him from
having to offer a lower price or from sweetening the deal in some other way to win the business. The foreign customer is happy to accept
the advantageous financing for a variety of
reasons, among which is the fact that his capital costs are now lower relative to what they
would have been and relative to the costs of his
competitorsincluding his U.S. competitors,
who are now on the outside looking in.
Ex-Im helps some U.S. companies increase
their exports sales. But it hinders other U.S.
companies efforts to compete at home and

abroad. Moreover, by subsidizing export sales,


Ex-Im artificially diverts domestic supply, possibly causing U.S. prices to rise and rendering
U.S. customers less important to their U.S.
suppliers. Especially in industries where there
are few producers, numerous customers, and
limited substitute products, Ex-Im disrupts
the relationships between U.S. buyers and U.S.
sellers by infusing the latter with greater market power and leverage.
Delta was able to connect the dots. Other
companies have, too. But most of the time,
the downstream U.S. companies are unwitting
victims of this gradual and silent cost-shifting.

UPSTREAM BENEFITS AND


DOWNSTREAM COSTS
Supporters tend only to speak of the benefits of Ex-Im activities, as if there were no opportunity costs, intra-industry costs, or downstream industry costs. But those costs exist
and they need to be taken into consideration
as part of a net benefit analysis, where:
Net Benefit = Gross Benefit Opportunity Cost

Intra-Industry Cost Downstream

Industry Cost
While it is intuitive that the full costs of
Ex-Im include the opportunity costs and intraindustry costs, as explained earlier, their estimation requires making certain assumptions
and assigning probabilities that are contestable and that would detract from the thrust of
this analysis. Suffice it to recognize that these
costs are real, but go uncaptured in the following analysis. By setting those costs to zero, the
equation becomes:
Net Benefit = Gross Benefit Downstream

Industry Cost
To estimate benefits, Export-Import Bank
transaction data for the period 20072013
compiled from annual reportswere obtained
from the Ex-Im website.5 Based on the information in the product description field, each

record was assigned a six-digit North American Industry Classification System (NAICS)
code. The NAICS is the standard used by
Federal statistical agencies in classifying business establishments for the purpose of collecting, analyzing, and publishing statistical
data related to the U.S. business economy.6
A six-digit NAICS code identifies an industry
at the most detailed level of specificity, while
a three-digit code reflects the aggregated industry classification. For example, NAICS
336111 represents Automobile Manufacturing, which is a subset of NAICS 33611 (Automobile and Light Duty Motor Vehicle Manufacturing), which is a subset of NAICS 3361
(Motor Vehicle Manufacturing), which is a
subset of NAICS 336, representing the broader Transportation Equipment Manufacturing
industry. All NAICS codes that begin with the
numbers 3133 represent industries within the
manufacturing sector. At the three-digit level,
there are 21 official manufacturing industries
in the United States. At the six-digit level,
there are 237 individual manufacturing sector
sub-industries.7
The following summary statistics derive
from these data:
Ex-Im authorized $167.8 billion over
24,366 transactions during the sevenyear period, which comes to about $24
billion per year and $6.9 million per
transaction;
Manufactured exports accounted for
$107.1 billion and 14,101 transactions for
an average of about $15 billion per year
and $7.6 million per transaction;
Aircraft accounted for nearly $57 billion of the manufacturing total, which
was spread over 722 authorizations, the
average value of which was about $80
millionmore than 10 times the value of
the average manufacturing sector transaction;
Producers in all 21 broad manufacturing
industries (3-digit NAICS) received subsidies;
Producers in 225 of 237 manufacturing

Supporters
tend only to
speak of the
benefits of
Ex-Im
activities, as if
there were no
opportunity
costs,
intra-industry
costs, or
downstream
industry
costs.

Among
the most
prominent
issues in trade
policy in
recent years
has been
concern about
globally interdependent
supply chains
and how
policy is used
to extract
advantages
for some and
impose costs
on other
segments of
the supply
chain.

sub-industries (6-digit NAICS) received


subsidies.
While aircraft manufacturers (NAICS
336411)Boeing, primarilyreceived $57 billion over the seven-year period, additional
subsidies, to the tune of almost $50 billion,
were provided to exporters in all 21 broad U.S.
manufacturing industries from food, textiles,
and wood products to machinery, computers,
and transportation equipment.
At the six-digit level of specificity, manufacturers in 225 of 236 industries partook of
the $50 billion in non-aircraft manufacturing
largesse.8 The range of subsidies spans from
$0 (for 11 industries receiving no benefits) to
$5.2 billion (for turbine and turbine generator
set units). The median value was $39.9 million
and the mean (skewed far to the right by billion dollar-plus subsidies to 11 industries) was
$213.9 million.
Although subsidies like these have been
shown to weaken firms over time by reducing
their incentive to be efficient and competitive,
this analysis assumes that the subsidy amounts
authorized are approximations of the benefits of Ex-Im.9 The analysis takes as given the
claim that the value of Ex-Ims authorizations
are benefits that translate dollar-for-dollar into
U.S. exports that would not have materialized
in the absence of Ex-Im support. In other
words, the analysis accepts the rationale for ExIms existence put forth in its marketing materials, so as to focus on one major oversight.
Consider the impact on firms in downstream industries. As already described, when
companies are given artificial incentives to export, industries downstream to the subsidized
exporters bear a cost. Domestic supply is diverted, more market power is bestowed upon
upstream suppliers, and foreign competitors
capital costs are reduced, giving them an advantage over U.S. firms.
These effects are not merely theoretical.
Among the most prominent issues in trade
policy in recent years has been concern about
globally interdependent supply chains and
how policy is used to extract advantages for

some and impose costs on other segments of


the supply chain. In recent years, the U.S. government brought disputes to the World Trade
Organization in hopes of ending Chinese
export restrictions on certain raw materials
and rare earth elements. In both cases, the
adverse economic impacts of the restrictions
on downstream U.S. industries were the main
reasons for pursuing dispute resolution. ThenU.S. Trade Representative Ron Kirk had the
following to say about the matter:
China maintains a number of measures
that restrain exports of raw material inputs for which it is the top, or near top,
world producer. These measures skew
the playing field against the United
States and other countries by creating
substantial competitive benefits for
downstream Chinese producers that use
the inputs in the production and export
of numerous processed steel, aluminum
and chemical products and a wide range
of further processed products.10
Policymakers are aware that restrictions on
access to crucial intermediate goods raise production costs for industry. Some have worked
to remove unnecessary impediments. Traditionally, the Miscellaneous Tariff Bill has been
a legislative vehicle for removing nuisance tariffs on industrial inputs.11 Upon signing the last
MTB into law, President Obama said:
To make their products, manufacturerssome of whom are represented
here todayoften have to import certain materials from other countries and
pay tariffs on those materials. This legislation will reduce or eliminate some
of those tariffs, which will significantly
lower costs for American companies
across the manufacturing landscape
from cars to chemicals; medical devices
to sporting goods. And that will boost
output, support good jobs here at home,
and lower prices for American consumers.12

Ready access to imported intermediate


goods is paramount to manufacturing success
in our globalized economy. Over the past five
years, industrial supplies and materials and
capital goods except automotive accounted
for an average of 55 percent of goods imports.13
These are the purchases of U.S. downstream
industries. Trade restrictions that impede domestic producers access to inputs put them at
a cost disadvantage vis--vis foreign competitors with better access. Likewise, export subsidiesby encouraging exportshave the same
deleterious effects on domestic downstream
industries. These costs are real and there is no
ignoring them in any legitimate analysis of the
effect of Ex-Ims policies.

ANALYSIS METHODOLOGY
Returning to the fictitious example of steel
sales to foreign farm equipment producers, the
$50 million loan to the foreign customer would
be counted as a $50 million benefit to the U.S.
economy, according to Ex-Ims methodology. In
reality, the benefit accrues to U.S. Steel Corporationnot the broader economyand some
percentage of that $50 million is a cost borne
by U.S. farm equipment producers.
What percentage? That depends on steels
relative importance as an input in the production of farm equipment. If steel accounts for 90
percent of the cost of all intermediate inputs
used in farm equipment manufacturing, then
$45 million would be the cost borne by that industry (0.9 x $50 million). If steel accounts for
only 10 percent of the value of all intermediate
inputs used to manufacture farm equipment,
then $5 million would be the cost to the industry (0.1 x $50 million). Weighting is necessary
because the extent of the cost inflicted on the
downstream U.S industry depends on the importance of the intermediate good being subsidized to the production of the downstream
product. If steel only accounts for 10 percent
of all input costs, then subsidized steel sales to
foreign companies have a smaller competitive
impact on U.S. firms than if steel accounted for
a larger share of the input costs.

Ideally, this approach to calculating the


benefits and downstream costs would be possible. But customer names in the Ex-Im database are often missing or cryptic and the
records lack information about the buyers
industry. Thus, it would be difficult to discern
the name of U.S. Steels foreign customer (in
the fictitious example) using the Ex-Im database and even more difficult to ascertain that
the customer is in the farm equipment manufacturing industry. Moreover, U.S. farm equipment manufacturers would not be the only
victims in this transaction. They are most adversely affected because their foreign competition is being directly subsidized by U.S. taxpayers, but other U.S. industries that consume
steel are adversely affected by the supply diversion and its impact on the balance of market
power between them and their steel suppliers.
These impediments necessitate a different
approach. Fairly precise calculations of the
benefits of Ex-Im by industry can be culled
directly from the transactions database. Although the name of the exporter or supplier
is frequently missing, product descriptions
(and thus NAICS product codes) are available
for 23,606 of 24,366 transactions. And the real
costs of Ex-Ims subsidies can be estimated using input-output tables in conjunction with
the Ex-Im transactions database. On its website, the Bureau of Economic Analysis maintains a set of input-output tables that map the
relationships between industries throughout
the U.S. economy. Among the information
that can be discerned from those tables are
the disposition of output from any and all industries and the input use requirements of any
and all industries.14
The first observation about the BEA 2007
I-O Use Table is that 45 percent of the value
of all U.S. economic output is consumed as inputs in the production of other industries.15
The interdependence of industries is even
more striking with respect to manufacturing
output, of which 55 percent is consumed as
inputs in the production of other industries.16
The I-O table also reveals how many industries output each industry requires as inputs

Trade
restrictions
that impede
domestic
producers
access to
inputs put
them at a cost
disadvantage
vis--vis
foreign competitors with
better access.
Likewise,
export
subsidiesby
encouraging
exports
have the same
deleterious
effects on
domestic
downstream
industries.

for its own production, as well as how much


output it requires from each. With this snapshot of industrial interdependence in mind, it
is not so difficult to understand how artificial
incentives aimed at changing the behavior of
particular firms or industries can have ripple
effects throughout the economy.
The benefit of Ex-Im to a given industry
(Industry X) was calculated simply as the aggregate of Ex-Im subsidies for all companies in
Industry X. The cost of Ex-Im to Industry X
was calculated as the benefits accruing to every industry upstream of Industry X, weighted
by the relative importance of each upstream
industrys output as an input to Industry X,
and then aggregated.
Assume Industry X produces widgets from
rubber, steel, and paint and that those three
inputs account for 50 percent, 30 percent, and
20 percent, respectively, of Industry Xs input

costs. To derive the downstream cost imposed


on Industry X, the following steps are necessary:
1. Identify Industry Xs upstream industries (three, in this example).
2. Total the value of Ex-Im subsidies given
to each upstream industry.
3. Weight the value of each total by the
relative importance of each input: (.5
rubber subsidies) + (.3 steel subsidies) +
(.2 paint subsidies).
4. Aggregate the weighted values.
This process was undertaken for every industry and the adjusted, aggregated costs ranged
from $8.0 million for Primary smelting and
refining of copper (331411) to $2.6 billion
for Broadcast and wireless communications
equipment manufacturing (334220) with a
median value of $132.2 million.

Figure 1
Scatterplot of 236 Sub-Industries in Cost-Benefit Space
An Industry-by-Industry Snapshot of the Benefits and Costs of Ex-Im
($ Received from Ex-Im and $ Received by Upstream Suppliers by NAICS-6 Code)
10,000,000,000

$ to Upstream Suppliers

The cost of
Ex-Im to
Industry X
was calculated
as the benefits
accruing to
every industry
upstream of
Industry X,
weighted by
the relative
importance of
each upstream
industrys
output as an
input to
Industry X,
and then aggregated.

1,000,000,000

100,000,000

10,000,000

1,000,000
1,000,000

10,000,000
100,000,000
$ Benefits from Ex-Im

1,000,000,000

Source: Compiled from Bureau of Economic Analysis, Input-Output Use Table, http://www.bea.gov/industry/xls/
iouse_before_redefinitions_pur_2007_detail.xlsx; and Export-Import Bank of the United States, FFATA (Federal Funding
Accountability and Transparency Act) Transaction Information, 20072013, http://www.exim.gov/about/library/foia/
Frequently-Requested-Reports-and-Information.cfm.

IDENTIFYING THE VICTIMS


Plotting these costs on the vertical axis and
combining with the benefits on the horizontal
axis, the scatterplot tells the first part of the
story (see Figure 1).
First note that the axes are in logarithmic
scales because otherwise the wide range of
values for both metrics would have stretched
both axes to the point of obscuring the details.
Values on the X-axis represent benefits (dollar
authorizations from Ex-Im) to each industry
and values of the Y-axis represent costs (adjusted, aggregated benefits to each industrys
upstream supplier industries).
The quadrants are formed by the intersection of the lines drawn at the median values
of each metric. Accordingly, the top-right and
bottom-right quadrants are populated by industries that received above-median benefits
and the top-left and bottom-left quadrants
show industries that received below-median
benefits. Likewise, the top-left and top-right
quadrants contain industries that incurred
above-median costs and the lower-left and
lower-right quadrants are populated by industries that incurred below-median costs.
With that in mind, the 36 industries represented by dots in the bottom-right quadrant
are those industries that received above-median benefits and incurred below-median costs.
One might expect to find the winners of
Ex-Ims policies concentrated in this most desirable quadrant. The 82 industries in the topright quadrant are those that received abovemedian benefits and incurred above-median
costs. The 82 industries in the bottom-left received below-median benefits and incurred
below-median costs. And the 36 industries in
the top-left received below-median benefits
and incurred above-median costs, which by
most definitions would constitute the victims of Ex-Ims policies.
Indeed, each of the 36 industries in the top
left quadrant is an Ex-Im victim, which is defined as an industry with negative net benefits
(where benefit minus cost is less than $0). But
the other quadrants are also heavily populated

by industries with negative net benefits. Even


though their benefits were above the median
benefit and their costs were below the median
cost, 24 of the 36 industries in the bottom-right
quadrant incurred costs in excess of benefits;
48 of 82 in the top right quadrant had negative
net benefits; and the same is true of 81 of the 82
industries in the bottom left quadrant. Using
this conservative approach to estimating the
often ignored costs of Ex-Ims subsidies, 189 of
the 236 non-aircraft U.S manufacturing industries can be characterized as victims.
While the appendix contains data for all
236 non-aircraft manufacturing industries
plotted in Figure 1, the following table reveals
details for the 25 biggest victims (those incurring the largest net costs).
It turns out that for nearly every Ex-Im financing authorization that might advance the
fortunes of a single U.S. company, there is at
least one U.S. industryand often dozens or
scores of industrieswhose firms are adversely
impacted because supply is being diverted,
market power is being shifted, and the cost of
capital is being lowered for their foreign competition.
Telephone apparatus manufacturing (NAICS 334210), which falls within the computers and electronics industry (NAICS 334),
incurred the greatest net cost among all manufacturers. As shown in the table, companies
in the industry received $148 million of export subsidies over the seven-year period. But
telephone apparatus manufacturing relies on
the output of 51 upstream industries, which
received an aggregate total of nearly $12 billion in subsidies over the period. Weighting
those subsidies by the relative importance of
each industrys output to the production of
telephone apparatus (and then aggregating)
generates the cost of Ex-Im to manufacturers in this industry. With just over $1 billion in
downstream costs, the net benefits of Ex-Im
to this industry amount to -$875 million or a
cost of $125 million per year.
A total of 189 out of 236 industries populating all of the 21 broad manufacturing industries
can be counted among Ex-Ims victims. The

Using this
conservative
approach to
estimating the
often ignored
costs of ExIms subsidies,
189 of the 236
non-aircraft
U.S manufacturing industries can be
characterized
as victims.

Special tool, die, jig, and fixture manufacturing

Other engine equipment manufacturing

Other communications equipment manufacturing

Automatic environmental control manufacturing

Printed circuit assembly (electronic assembly) manufacturing

Custom roll forming

Other aircraft parts and auxiliary equipment manufacturing

Metal tank (heavy gauge) manufacturing

Motor home manufacturing

Plastics and rubber industry machinery manufacturing

Totalizing fluid meter and counting device manufacturing

Photographic and photocopying equipment manufacturing

Motor vehicle metal stamping

Crown and closure manufacturing and metal stamping

Ophthalmic goods manufacturing

Computer storage device manufacturing

Showcase, partition, shelving, and locker manufacturing

Wood kitchen cabinet and countertop manufacturing

Search, detection, and navigation instruments manufacturing

Motor vehicle electrical and electronic equipment manufacturing

Coating, engraving, heat treating and allied activities

Heating equipment (except warm air furnaces) manufacturing

Leather and allied product manufacturing

Motor vehicle body manufacturing

333514

333618

334290

334512

334418

332114

336413

332420

336213

333220

334514

333315

336370

33211B

339115

334112

337215

337110

334511

336320

332800

333414

316000

336211

78,836,306

52,690,000

15,185,000

23,620,000

400,000

176,715,150

4,960,000

12,250,000

15,745,436

2,500,000

19,312,482

36,831,303

1,575,000

4,672,000

24,326,704

76,376,470

2,010,000

1,250,000

40,851,009

197,646,244

40,088,068

45,429,081

147,419,998

61

40

51

54

78

78

45

57

45

41

53

61

41

50

57

60

52

58

35

65

44

50

83

48

51

Upstream
Industries
(#)

10,426,401,039

5,321,239,152

15,541,954,577

11,118,360,745

15,496,703,066

16,372,746,193

6,713,203,059

8,267,861,428

7,162,664,633

6,497,707,509

10,022,336,419

10,544,408,152

6,512,784,246

13,671,774,497

15,906,824,085

8,578,635,873

15,160,978,308

71,806,833,591

6,472,306,758

15,246,770,927

10,911,586,754

11,503,018,767

83,606,086,497

9,564,286,909

11,966,645,775

Subsidies to
Upstream
Industries ($)

259,239,994

237,339,977

200,805,406

211,247,025

195,146,612

373,409,391

203,508,600

213,380,340

222,444,793

216,338,344

234,638,448

257,225,156

223,671,500

228,118,535

238,968,562

254,240,593

296,482,820

363,770,471

301,401,728

329,087,593

409,260,618

574,087,131

432,882,197

471,006,342

1,022,056,608

Cost to
Industry ($)

-180,403,688

-184,649,977

-185,620,406

-187,627,025

-194,746,612

-196,694,242

-198,548,600

-201,130,340

-206,699,357

-213,838,344

-215,325,966

-220,393,853

-222,096,500

-223,446,535

-238,968,562

-254,240,593

-272,156,116

-287,394,001

-299,391,728

-327,837,593

-368,409,609

-376,440,887

-392,794,129

-425,577,261

-874,636,610

Net Benefits
($)

-25,771,955

-26,378,568

-26,517,201

-26,803,861

-27,820,945

-28,099,177

-28,364,086

-28,732,906

-29,528,480

-30,548,335

-30,760,852

-31,484,836

-31,728,071

-31,920,934

-34,138,366

-36,320,085

-38,879,445

-41,056,286

-42,770,247

-46,833,942

-52,629,944

-53,777,270

-56,113,447

-60,796,752

-124,948,087

Annualized Net
Benefits ($)

Compiled from Bureau of Economic Analysis, Input-Output Use Table, http://www.bea.gov/industry/xls/iouse_before_redefinitions_pur_2007_detail.xlsx; and Export-Import Bank of the United States,
FFATA (Federal Funding Accountability and Transparency Act) Transaction Information, 2007-2013, http://www.exim.gov/about/library/foia/Frequently-Requested-Reports-and-Information.cfm.

Telephone apparatus manufacturing

Sub-Industry Description

334210

NAICS 6

Subsidies to
Industry ($)

Table 1
Top 25 Manufacturing Industry Victims of Ex-Im Bank Subsidies
10

annual cost for these 189 victims was an aggregated $2.8 billion or $14.7 million per industry.
There are hundreds and probably thousands
of U.S. companies scattered over these 189 industries that produce in the United States, employ American workers, pay federal, state, and
local taxes, and contribute to the social fabric
of the communities in which they operate. But
they are competitively disadvantagedvictimizedby Ex-Ims provision of subsidies that
benefit their foreign competitors and reduce
their leverage vis--vis their U.S. suppliers.
These are the unseen consequencesthe collateral damageof Ex-Ims mission.
Meanwhile, a total of 47 of 236 manufacturing sub-industries populating 13 of 21 broad
manufacturing industries can be counted
among Ex-Ims winners. Between 2007 and
2013, gross Ex-Im benefits of $42.8 billion and
downstream costs of $13.3 billion accrued to
these 47 winners, who realized a net benefit of
$29.5 billion or $4.2 billion per year or $89.8
million per sub-industry per year as a result of
Ex-Im.
In essence, Ex-Im policies amount to a net
tax of $2.8 billion per year on 189 sub-industries ($15 million per industry) and a net subsidy of $4.2 billion per year to 47 sub-industries
($90 million per industry). For the winners,
the downstream costs amount to less than
one-third of the benefits received; for the losers, who outnumber the winners by a margin
of 4-to-1, the costs are more than triple the
benefits. One would be hard-pressed to find a
better example of a policy that produces a few
winners at the expense of a multitude of losers.
Table 2 presents the results consolidated
at the 3-digit NAICS level to provide more of
a birds-eye view of the benefits received and
costs incurred by industry. The data are presented in ascending order of net benefits
so that the most heavily-burdened industries
appear at the top. Sixteen of the 21 broad
manufacturing industries experienced costs in
excess of benefits over the seven-year period
with Electrical equipment, appliance and
components manufacturers (NAICS 335) incurring the biggest loss at $1.5 billion. Each of

the 17 sub-industries within NAICS 335 experienced losses over the period.
Eight of the 21 broad manufacturing industries consist only of sub-industries that are ExIm victims: Electrical equipment, appliance
and components (335); furniture and related
products (337); nonmetallic mineral products
(327); paper (322); leather and allied products
(316); beverage and tobacco products (312);
printing (323); and apparel (315).
Of the five broad industries that experienced positive net benefits, machinery producers (NAICS 333) fared best. However,
within the machinery industryas well as
within the other winning industriesmost
of the sub-industries experienced losses. Out
of 30 machinery sub-industries, 17 experienced losses; two-thirds of transportation
equipment sub-industries and 85 percent of
fabricated metal product sub-industries also
incurred net losses.
These figures would all seem to confirm
that Ex-Im helps some companies in some industries, but at great cost to industries across
the manufacturing spectrum, which is to say
Ex-Im amounts to an exercise in picking winners and losers.

VICTIMS STATE-BY-STATE
The victims of Ex-Im are scattered across
industries and across U.S. states. But every
broadly defined industry and every state can
count victims among its manufacturing firms.
Tables 3 and 4 provide overviews of the manufacturing victims by state. Table 3 ranks the
contribution of the 10 most victimized manufacturing industries to each states manufacturing GDP. The industry accounting for the
most manufacturing GDP in each state is assigned a value of 1. The most important manufacturing industry was a top-10 victim for 33
states and the first or second most important
industry was a top-10 victim in 47 states.
Table 4 presents the cumulative contribution to each states manufacturing GDP of the
10 most victimized manufacturing industries.
Field 1st represents the contribution of Elec-

11

One would be
hard-pressed
to find a
better
example of
a policy that
produces a
few winners at
the expense of
a multitude of
losers.

Electrical Equipment, Appliances and Components

Furniture and Related Products

Food

Nonmetallic Mineral Products

Chemicals

Computers and Electronics

Plastics and Rubber Products

Paper

Primary Metals

Other Miscellaneous Manufacturing

Textile Products

Leather and Allied Products

Beverage and Tobacco Products

Petroleum and Coal Products

Printing

Apparel

Wood Products

Textiles

Transportation Equipment

Fabricated Metal Products

Machinery

All Manufacturing (except Aircraft)

335 Total

337 Total

311 Total

327 Total

325 Total

334 Total

326 Total

322 Total

331 Total

339 Total

314 Total

316 Total

312 Total

324 Total

323 Total

315 Total

321 Total

313 Total

336 Total

332 Total

333 Total

31-33

50,470,218,209

21,536,730,653

6,584,036,681

6,626,326,685

420,285,975

712,243,357

43,500,000

89,776,926

292,832,863

91,949,708

52,690,000

96,468,507

1,244,677,896

689,746,792

272,004,250

680,594,667

7,365,320,952

1,574,603,710

134,009,974

1,168,487,188

83,120,604

710,810,822

Subsidies to
Industry ($)

40,420,380,762

7,558,069,762

4,479,619,483

4,629,410,030

253,106,529

598,877,609

79,028,224

233,227,079

440,071,835

272,687,768

237,339,977

282,166,755

1,487,933,004

987,323,007

718,139,682

1,276,686,586

8,003,656,060

2,321,709,634

973,968,459

2,123,854,482

1,259,801,725

2,203,703,072

Cost to
Industry ($)

10,049,837,447

13,978,660,891

2,104,417,197

1,996,916,656

167,179,447

113,365,747

-35,528,224

-143,450,153

-147,238,972

-180,738,061

-184,649,977

-185,698,247

-243,255,108

-297,576,215

-446,135,432

-596,091,919

-638,335,109

-747,105,924

-839,958,485

-955,367,294

-1,176,681,121

-1,492,892,250

Net Benefits
($)

1,435,691,064

1,996,951,556

300,631,028

285,273,808

23,882,778

16,195,107

-5,075,461

-20,492,879

-21,034,139

-25,819,723

-26,378,568

-26,528,321

-34,750,730

-42,510,888

-63,733,633

-85,155,988

-91,190,730

-106,729,418

-119,994,069

-136,481,042

-168,097,303

-213,270,321

Annualized Net
Benefits ($)

236

30

20

24

11

10

10

20

19

12

24

17

189

17

17

18

15

14

12

22

17

Sub-Industries Sub-Industry
(#)
Victims (#)

Source: Compiled from Bureau of Economic Analysis, Input-Output Use Table, http://www.bea.gov/industry/xls/iouse_before_redefinitions_pur_2007_detail.xlsx; and Export-Import Bank of the United
States, FFATA (Federal Funding Accountability and Transparency Act) Transaction Information, 20072013, http://www.exim.gov/about/library/foia/Frequently-Requested-Reports-and-Information.cfm.

Industry Description

NAICS-3

Table 2
Benefits and Costs of Ex-Im to 21 Broadly-Defined Manufacturing Industries

12

15

17

13

10

12

12

11

16

12

10

15

12

11

16

17

16

10

10

12

10

Alaska

Arizona

Arkansas

California

Colorado

Connecticut

Delaware

Florida

Georgia

Hawaii

Idaho

Illinois

Indiana

Iowa

Kansas

Kentucky

Louisiana

Maine

Maryland

Massachusetts

Michigan

Minnesota

Mississippi

Missouri

17

16

15

14

16

17

17

15

12

16

14

10

17

15

16

16

14

16

17

14

13

14

337

335

Alabama

Furniture
and Related
Products

Electrical Equipment,
Appliances and
Components

311,312

Food,
Beverage,
Tobacco

13

16

14

13

12

11

15

13

12

10

14

14

13

12

13

14

13

13

13

327

Nonmetallic
Mineral
Products

Table 3
Top Ten Most Victimized Manufacturing Industries (Left to Right)
Rank of Contribution to State Manufacturing GDP

10

325

Chemicals

10

15

12

14

11

11

12

10

14

10

334

Computers
and
Electronics

12

11

10

10

10

10

326

Plastics and
Rubber
Products

12

14

11

13

10

16

11

16

13

17

12

17

14

15

18

322

Paper

14

14

10

12

13

16

13

15

11

13

15

12

17

339

Other
Miscellaneous
Manufacturing

Continued on next page

11

11

17

13

12

18

14

11

16

18

16

16

10

10

13

17

16

331

Primary
Metals

13

14

14

12

13

13

17

10

14

15

11

11

15

13

16

16

15

13

Nebraska

Nevada

New Hampshire

New Jersey

New Mexico

New York

North Carolina

North Dakota

Ohio

Oklahoma

Oregon

Pennsylvania

Rhode Island

South Carolina

South Dakota

Tennessee

Texas

Utah

Vermont

Virginia

Washington

West Virginia

Wisconsin

Wyoming

United States

16

13

16

16

17

16

12

12

16

17

17

14

16

16

18

16

13

11

16

16

14

18

15

15

13

Furniture
and Related
Products

11

Food,
Beverage,
Tobacco

14

13

12

13

10

11

12

13

15

13

11

11

13

11

11

10

11

Nonmetallic
Mineral
Products

10

Chemicals

11

13

11

14

13

Computers
and
Electronics

10

14

10

13

10

12

12

12

Plastics and
Rubber
Products

12

19

17

10

13

11

14

13

12

11

14

15

12

12

11

10

16

13

13

19

Paper

11

16

12

11

17

17

10

10

14

11

12

18

15

15

18

13

10

10

17

Primary
Metals

15

14

10

15

12

12

10

13

12

14

Other
Miscellaneous
Manufacturing

Source: Compiled from Bureau of Economic Analysis, Input-Output Use Table, http://www.bea.gov/industry/xls/iouse_before_redefinitions_pur_2007_detail.xlsx; Export-Import Bank of the United States,
FFATA (Federal Funding Accountability and Transparency Act) Transaction Information, 20072013, http://www.exim.gov/about/library/foia/Frequently-Requested-Reports-and-Information.cfm; and
Bureau of Economic Analysis, GDP by State, Manufacturing (interactive table), http://www.bea.gov/iTable/iTable.cfm?reqid=70&step=1&isuri=1&acrdn=1#reqid=70&step=6&isuri=1&7003=900&7004=nai
cs&7005=12&7001=1900&7002=1&7090=70.

15

Montana

Electrical Equipment,
Appliances and
Components

Table 3 Continued
14

7.6

7.5

7.0

6.3

6.1

5.7

5.2

5.1

4.9

4.7

4.1

3.9

3.8

3.7

3.3

3.2

3.0

3.0

2.6

2.5

2.5

2.4

2.2

2.0

2.0

1.9

South Carolina

Connecticut

Wisconsin

New Hampshire

Vermont

Arkansas

Mississippi

Missouri

Kentucky

North Carolina

Ohio

Pennsylvania

Georgia

Delaware

Rhode Island

Illinois

Minnesota

Massachusetts

Michigan

Virginia

Florida

New York

Wyoming

Iowa

New Jersey

1st (%)

Tennessee

State

2.7

4.4

2.3

3.4

3.9

3.9

5.4

3.3

4.5

3.8

4.9

4.2

5.1

5.3

4.9

6.0

5.4

5.9

10.9

6.1

7.9

6.7

8.1

7.6

8.2

8.5

2nd (%)

11.1

28.4

6.3

18.7

19.5

43.2

13.0

8.9

15.6

15.9

11.0

19.9

29.9

17.0

15.0

26.6

26.0

27.1

19.7

25.5

25.2

13.4

21.8

12.3

13.9

24.5

3rd(%)

Table 4
Top Ten Most Victimized Manufacturing Industries
Cumulative Contribution to State Manufacturing GDP

13.4

30.7

10.5

21.1

22.8

45.1

14.6

10.2

17.6

17.3

12.6

21.1

33.1

19.5

17.7

28.3

27.8

29.1

21.5

27.3

28.8

16.3

24.2

13.1

16.3

27.1

4th(%)

60.3

49.7

38.9

47.1

36.2

57.0

21.6

27.4

24.5

33.7

27.4

60.5

45.1

39.8

33.4

62.8

39.0

46.4

34.2

33.9

32.4

20.0

33.2

32.9

31.1

41.0

5th(%)

68.2

54.8

39.6

59.8

52.6

61.4

23.6

59.2

40.2

39.8

35.7

71.3

49.2

45.3

35.4

70.1

41.9

49.5

36.4

35.7

62.1

50.0

38.3

38.7

33.3

43.8

6th(%)

71.4

59.0

40.6

62.8

55.7

66.1

27.6

62.3

43.5

44.5

42.8

77.1

53.9

50.2

41.0

74.0

45.8

52.4

42.6

43.6

65.3

55.9

43.4

40.8

42.9

47.5

7th(%)

73.8

61.2

40.6

65.0

59.5

68.4

29.1

64.0

47.7

46.8

45.3

82.4

60.8

55.2

43.0

75.8

49.7

56.5

47.1

54.9

67.2

56.9

51.1

42.6

50.5

53.4

8th(%)

81.1

66.7

41.1

72.4

69.5

71.1

36.9

73.7

57.7

54.1

73.5

88.1

65.1

69.2

51.1

79.8

56.4

61.4

54.1

66.9

73.8

66.2

56.5

52.3

56.6

62.3

10th(%)

Continued on next page

75.3

65.0

40.8

66.3

61.0

69.5

33.7

65.1

49.1

49.4

56.1

83.9

62.5

64.6

49.0

77.1

55.3

59.4

51.6

65.3

67.9

59.9

54.1

44.5

53.8

57.1

9th(%)

15

1.7

1.7

1.5

1.5

1.5

1.4

1.4

1.4

1.1

1.1

1.1

1.0

1.0

0.8

0.8

0.8

0.6

0.5

0.4

0.3

0.3

0.3

0.1

2.6

Colorado

Kansas

Utah

California

South Dakota

Oklahoma

Arizona

Nevada

Nebraska

Idaho

Texas

West Virginia

Indiana

Maryland

Washington

New Mexico

Oregon

Maine

Montana

Hawaii

North Dakota

Louisiana

Alaska

United States

3.8

0.5

0.4

1.5

2.1

1.3

1.5

1.0

1.3

1.4

1.9

2.5

2.0

1.8

2.0

1.9

2.5

2.6

1.9

4.1

2.4

4.0

2.6

3.2

3.8

2nd (%)

15.2

35.3

4.3

25.5

33.9

10.3

16.6

4.9

9.8

8.4

15.7

8.2

4.6

6.9

25.6

27.5

12.4

9.7

11.5

19.0

12.4

11.0

18.3

18.9

9.6

3rd(%)

17.1

38.9

5.4

31.5

39.2

14.5

18.1

5.8

12.0

10.0

17.6

9.5

8.3

8.4

26.7

28.9

17.1

12.0

15.8

21.8

13.6

14.0

19.9

22.2

11.6

4th(%)

35.3

39.5

43.9

35.1

43.4

18.1

27.3

6.9

16.5

12.6

50.5

39.0

52.4

30.6

34.4

53.0

22.8

19.9

22.8

33.6

31.7

27.5

30.7

36.6

24.0

5th(%)

47.7

40.8

44.3

39.2

45.0

20.0

33.8

84.9

66.8

19.5

70.4

41.0

53.8

42.3

75.6

55.4

30.2

51.7

27.6

37.3

58.9

36.8

35.5

59.4

27.3

6th(%)

51.1

41.6

45.1

43.0

46.8

20.9

38.0

85.7

67.7

20.8

75.0

44.1

58.0

44.3

77.9

59.3

34.3

53.9

32.7

39.7

60.8

39.1

39.6

61.5

31.4

7th(%)

53.7

41.6

47.8

43.5

47.1

21.0

53.3

87.3

69.0

23.3

76.2

45.0

58.7

45.3

79.9

60.4

35.7

54.9

35.8

41.2

62.0

41.8

40.2

62.2

39.0

8th(%)

56.9

41.8

48.9

43.6

47.1

21.3

53.7

89.3

69.4

24.9

77.8

52.5

67.8

47.2

80.5

62.0

37.5

59.7

37.9

42.7

62.9

61.4

41.1

63.8

50.7

9th(%)

61.1

42.2

49.4

44.5

50.2

24.6

55.9

90.6

71.5

26.9

79.8

59.9

71.3

48.5

81.6

71.9

80.6

65.6

39.8

62.8

69.5

72.4

42.6

72.5

52.2

10th(%)

Source: Compiled from Bureau of Economic Analysis, Input-Output Use Table. http://www.bea.gov/industry/xls/iouse_before_redefinitions_pur_2007_detail.xlsx; Export-Import Bank of the United States,
FFATA (Federal Funding Accountability and Transparency Act) Transaction Information, 20072013, http://www.exim.gov/about/library/foia/Frequently-Requested-Reports-and-Information.cfm; and
Bureau of Economic Analysis, GDP by State, Manufacturing (interactive table), http://www.bea.gov/iTable/iTable.cfm?reqid=70&step=1&isuri=1&acrdn=1#reqid=70&step=6&isuri=1&7003=900&7004=nai
cs&7005=12&7001=1900&7002=1&7090=70.

1.8

1st (%)

Alabama

State

Table 4 Continued
16

trical equipment, appliance and components


manufacturing (NAICS 335)the biggest victimto each states manufacturing value-added. So for Tennessee, manufacturing industry
335 (the 1st largest victim) accounted for 7.6 percent of the states manufacturing value added.
NAICS 335 accounted for 7.5 percent of South
Carolinas manufacturing value added. Field
2nd represents the cumulative contribution
of the first and second largest victims of ExImthe second largest (with reference to Table
3) being NAICS 337, Furniture and related
products. Field 3rd is the cumulative contribution of the top three victims to each states
manufacturing value-added, and so on.
Table 4 is sorted in descending order of
1st (the largest victims contributions to the
respective states manufacturing value-added).
States appearing near the top of the table are
likely most ill-affected by the quiet impositions thrust upon their electrical equipment
producers in the form of heightened competition at home and abroad from foreign producers benefiting from U.S. taxpayer subsidies.
But to get a better picture of the states that
are likely paying the highest price for Ex-Im,
look at the 5th column or the 10thcolumn,
which reveal the cumulative contributions of
the top 5 and top 10 biggest victims, respectively, to each states manufacturing valueadded. The top-5 victims cumulatively account for 50 percent of more of manufacturing
value-added in seven U.S. states: North Carolina (62.8%), Delaware (60.5%), New Jersey
(60.3%), Virginia (57.0%), Nebraska (53.0%),
West Virginia (52.4%), and Maryland (50.5%).
The top 10 victims cumulatively account for
two-thirds or more of manufacturing valueadded in 22 states.
For 17 U.S. states, the largest manufacturing
industry was a top-5 Ex-Im victim. The chemical industrythe fifth largest Ex-Im victimis
the largest manufacturing industry in 11 states.
The data reveal countless compelling facts
about the costs of Ex-Im and which industries
and states bear them.
It is evident from this analysis that although Ex-Ims subsidies may benefit certain

industries and states in the short-run, they adversely affect other industries and states. The
fact that Table 2 shows positive net benefits,
overall, does nothing to mitigate the fact that
Ex-Ims operations essentially rob Peter to pay
Paul. In fact, that table shows that for every
dollar of subsidies doled out to the winners,
$0.80 is imposed as a downstream cost on the
victims ($50 billion in benefits vs. $40 billion
in adjusted costs), which renders Ex-Im a very
inefficient form of industrial policy.

CONCLUSION
In their efforts to win reauthorization from
Congress, supporters of the Export-Import
Bank rely on exaggerated claims about the
Banks benefits, while ignoring its costs. Ex-Im
pays for itself, the argument goes, as though that
claim accounts for the opportunity costs, intraindustry costs, and downstream industry costs.
Realistically, Ex-Im financing helps two
sets of companies (in the short-run): U.S. firms
whose export prices are subsidized by belowmarket-rate financing and the foreign firms
that purchase those subsidized exports. Those
same transactions impose costs on two different sets of companies: competing U.S. firms in
the same industry, who do not get Ex-Im backing, and U.S. firms in downstream industries,
whose foreign competition is now benefitting
from reduced capital costs courtesy of U.S.
government subsidies.
The facts are that Ex-Im policies reward
some companies and penalize many others in
the process. The victims of Ex-Ims policies
populate 189 of 236 non-aircraft manufacturing sub-industries and all of the 21 broad manufacturing industry categories. The costs are
borne in every U.S. state and in many of them
the victims are crucial industries. The top-5
victims cumulatively account for 50 percent or
more of manufacturing value-added in 7 U.S.
states, and the top 10 victims cumulatively account for two-thirds or more of manufacturing value-added in 22 states. In 17 U.S. states,
the largest manufacturing industry was a top-5
Ex-Im victim.

17

If the
arguments
against
reauthorization were
not already
persuasive
enough, the
costs imposed
on unwitting
downstream
U.S. industries
by ExportImport Bank
subsidies is
perhaps
the most
compelling
reason to shut
down the
Bank.

18
This analysis took into quantitative consideration only the downstream costs, leaving the
intra-industry and opportunity costs alone.
The overall costs of Ex-Im are thus grossly understated. If the arguments against reauthori-

zation were not already persuasive enough, the


costs imposed on unwitting downstream U.S.
industries by Export-Import Bank subsidies
is perhaps the most compelling reason to shut
down the Bank.

Telephone apparatus manufacturing

Special tool, die, jig, and fixture manufacturing

Other engine equipment manufacturing

Other communications equipment manufacturing

Automatic environmental control manufacturing

Printed circuit assembly (electronic assembly) manufacturing

Custom roll forming

Other aircraft parts and auxiliary equipment manufacturing

Metal tank (heavy gauge) manufacturing

Motor home manufacturing

Plastics and rubber industry machinery manufacturing

Totalizing fluid meter and counting device manufacturing

Photographic and photocopying equipment manufacturing

Motor vehicle metal stamping

Crown and closure manufacturing and metal stamping

Ophthalmic goods manufacturing

Computer storage device manufacturing

Showcase, partition, shelving, and locker manufacturing

Wood kitchen cabinet and countertop manufacturing

Search, detection, and navigation instruments manufacturing

Motor vehicle electrical and electronic equipment manufacturing

Coating, engraving, heat treating and allied activities

Heating equipment (except warm air furnaces) manufacturing

Leather and allied product manufacturing

Motor vehicle body manufacturing

Office furniture and custom architectural woodwork and


millwork manufacturing

Institutional furniture manufacturing

333514

333618

334290

334512

334418

332114

336413

332420

336213

333220

334514

333315

336370

33211B

339115

334112

337215

337110

334511

336320

332800

333414

316000

336211

33721A

337127

Sub-Industry Description

334210

NAICS 6

23,293,856

4,375,000

78,836,306

52,690,000

15,185,000

23,620,000

400,000

176,715,150

4,960,000

12,250,000

15,745,436

2,500,000

19,312,482

36,831,303

1,575,000

4,672,000

24,326,704

76,376,470

2,010,000

1,250,000

40,851,009

197,646,244

40,088,068

45,429,081

147,419,998

Subsidies to
Industry ($)

56

64

61

40

51

54

78

78

45

57

45

41

53

61

41

50

57

60

52

58

35

65

44

50

83

48

51

9,048,872,564

11,060,059,101

10,426,401,039

5,321,239,152

15,541,954,577

11,118,360,745

15,496,703,066

16,372,746,193

6,713,203,059

8,267,861,428

7,162,664,633

6,497,707,509

10,022,336,419

10,544,408,152

6,512,784,246

13,671,774,497

15,906,824,085

8,578,635,873

15,160,978,308

71,806,833,591

6,472,306,758

15,246,770,927

10,911,586,754

11,503,018,767

83,606,086,497

9,564,286,909

11,966,645,775

Upstream Subsidies to Upstream


Industries (#)
Industries ($)

Appendix
Benefits and Costs of Ex-Im to 236 Six-Digit NAIC Manufacturing Sub-Industries

198,577,388

183,373,763

259,239,994

237,339,977

200,805,406

211,247,025

195,146,612

373,409,391

203,508,600

213,380,340

222,444,793

216,338,344

234,638,448

257,225,156

223,671,500

228,118,535

238,968,562

254,240,593

296,482,820

363,770,471

301,401,728

329,087,593

409,260,618

574,087,131

432,882,197

471,006,342

1,022,056,608

Cost to
Industry ($)

-25,040,505

-25,571,252

-25,771,955

-26,378,568

-26,517,201

-26,803,861

-27,820,945

-28,099,177

-28,364,086

-28,732,906

-29,528,480

-30,548,335

-30,760,852

-31,484,836

-31,728,071

-31,920,934

-34,138,366

-36,320,085

-38,879,445

-41,056,286

-42,770,247

-46,833,942

-52,629,944

-53,777,270

-56,113,447

-60,796,752

-124,948,087

Annualized Net
Benefits ($)

Continued on next page

-175,283,532

-178,998,763

-180,403,688

-184,649,977

-185,620,406

-187,627,025

-194,746,612

-196,694,242

-198,548,600

-201,130,340

-206,699,357

-213,838,344

-215,325,966

-220,393,853

-222,096,500

-223,446,535

-238,968,562

-254,240,593

-272,156,116

-287,394,001

-299,391,728

-327,837,593

-368,409,609

-376,440,887

-392,794,129

-425,577,261

-874,636,610

Net Benefits
($)

19

5,400,000
9,095,495
7,100,000

Primary battery manufacturing

Nonupholstered wood household furniture manufacturing

Analytical laboratory instrument manufacturing

Sign manufacturing

Carbon and graphite product manufacturing

Other household nonupholstered furniture

Ferrous metal foundries

Household refrigerator and home freezer manufacturing

Dog and cat food manufacturing

Other major household appliance manufacturing

Plastics bottle manufacturing

Household laundry equipment manufacturing

Synthetic dye and pigment manufacturing

Mechanical power transmission equipment manufacturing

Travel trailer and camper manufacturing

Turned product and screw, nut, and bolt manufacturing

Fluid power process machinery

Coffee and tea manufacturing

Small electrical appliance manufacturing

Metal cutting and forming machine tool manufacturing

Cutlery and handtool manufacturing

Office machinery manufacturing

Doll, toy, and game manufacturing

Office supplies (except paper) manufacturing

Electricity and signal testing instruments manufacturing

337122

334516

339950

335991

33712A

331510

335222

311111

335228

326160

335224

325130

333613

336214

332720

33399B

311920

335210

33351A

332200

333313

339930

339940

3363A0 Motor vehicle steering, suspension component, and brake


systems manufacturing

Ball and roller bearing manufacturing

335912

332991

334515

92,167,175

20,500,000

76,500,000

58,625,202

400,000

15,364,057

84,204,954

46,864,000

450,000

7,500,000

4,750,000

19,308,184

1,700,000

36,155,500

600,000

43,830,000

1,644,748

11,419,206

13,646,459

130,695,528

1,900,000

73,505,253

Industrial mold manufacturing

333511

88,358,900

Subsidies to
Industry ($)

Steel product manufacturing from purchased steel

Sub-Industry Description

331200

NAICS 6

Appendix Continued

48

41

81

51

48

50

57

50

49

16

45

50

62

45

34

40

32

53

37

53

55

52

28

57

56

62

42

43

55

13,490,389,250

9,002,793,011

11,616,126,867

10,036,434,054

8,027,518,907

6,780,405,626

10,598,652,385

10,118,204,462

7,270,419,140

1,608,889,654

9,512,392,032

10,145,298,118

8,653,662,207

7,705,946,013

11,893,448,024

4,692,258,304

5,840,628,695

7,608,228,837

3,706,763,593

7,800,394,242

10,256,536,104

6,255,793,221

4,973,092,439

10,733,443,541

14,271,023,332

9,446,591,038

6,748,542,021

9,019,490,847

9,664,910,682

Upstream Subsidies to Upstream


Industries (#)
Industries ($)

210,142,358

125,584,843

128,363,296

126,810,092

142,277,930

121,858,808

200,222,341

182,963,518

124,867,666

144,592,269

213,622,057

178,838,284

133,390,369

141,844,099

139,262,310

138,001,319

157,411,754

144,468,562

183,049,932

148,845,180

195,512,197

153,710,222

164,452,997

167,393,497

288,875,366

162,964,486

161,696,069

237,315,300

256,366,496

Cost to
Industry ($)

-16,853,598

-16,926,406

-17,038,257

-17,344,299

-17,396,847

-17,408,401

-17,674,620

-17,762,617

-17,781,095

-18,461,173

-18,488,158

-18,853,469

-18,991,481

-19,192,014

-19,216,044

-19,714,474

-19,729,081

-20,395,509

-20,984,919

-21,177,883

-21,668,885

-21,723,639

-21,861,970

-21,963,863

-22,597,120

-23,009,212

-23,099,438

-23,401,435

-24,001,085

Annualized Net
Benefits ($)

Continued on next page

-117,975,184

-118,484,843

-119,267,801

-121,410,092

-121,777,930

-121,858,808

-123,722,341

-124,338,316

-124,467,666

-129,228,212

-129,417,103

-131,974,284

-132,940,369

-134,344,099

-134,512,310

-138,001,319

-138,103,570

-142,768,562

-146,894,432

-148,245,180

-151,682,197

-152,065,474

-153,033,791

-153,747,038

-158,179,838

-161,064,486

-161,696,069

-163,810,048

-168,007,596

Net Benefits
($)

20

113,018,641

Ornamental and architectural metal products manufacturing

Household cooking appliance manufacturing

Motorcycle, bicycle, and parts manufacturing

Hardware manufacturing

Plastics pipe, pipe fitting, and unlaminated profile shape


manufacturing

Polystyrene foam product manufacturing

Urethane and other foam product (except polystyrene)


manufacturing

Fabricated pipe and pipe fitting manufacturing

Paint and coating manufacturing

Ground or treated mineral and earth manufacturing

All other transportation equipment manufacturing

Pesticide and other agricultural chemical manufacturing

Industrial process variable instruments manufacturing

Truck trailer manufacturing

Manufacturing and reproducing magnetic and optical media

All other forging, stamping, and sintering

Adhesive manufacturing

332320

335221

336991

332500

326120

326140

326150

332996

325510

327992

336999

325320

334513

336212

334610

33211A

325520

Propulsion units and parts for space vehicles and guided


missiles

Mineral wool manufacturing

Carpet and rug mills

Other concrete product manufacturing

Curtain and linen mills

Other basic inorganic chemical manufacturing

33641A

327993

314110

327390

314120

325180

33299A Ammunition, arms, ordnance, and accessories manufacturing

15,215,000

3252A0 Synthetic rubber and artificial and synthetic fibers and filaments manufacturing

31,367,512

800,000

22,450,000

4,487,823

10,400,000

5,000,000

35,857,085

70,926,303

59,913,746

44,720,874

127,671,182

9,662,757

26,100,814

13,550,000

82,414,915

131,230,449

3,500,000

24,690,648

64,097,497

22,785,000

9,350,000

24,500,000

11,366,833

Motor vehicle gasoline engine and engine parts manufacturing

336310

Subsidies to
Industry ($)

Sub-Industry Description

NAICS 6

Appendix Continued

45

28

53

31

51

43

45

41

36

40

57

52

38

50

25

43

41

47

38

35

57

32

53

62

39

83

13,135,388,051

5,522,533,080

7,190,726,256

5,242,845,193

7,063,055,245

11,563,521,008

9,287,983,946

11,024,743,071

8,422,435,492

7,168,765,546

10,083,566,512

13,858,535,940

9,396,132,647

7,074,841,197

5,177,870,228

12,049,113,094

9,521,727,753

6,917,081,027

6,157,341,498

6,024,966,543

10,193,663,976

3,788,644,558

7,783,501,742

14,853,751,158

8,490,514,540

11,910,789,362

Upstream Subsidies to Upstream


Industries (#)
Industries ($)

124,168,218

94,081,717

116,316,580

99,392,589

105,313,347

95,761,255

100,895,876

131,899,904

167,864,795

158,737,678

143,887,857

226,942,187

109,222,826

128,263,449

118,237,029

187,723,570

237,761,953

111,264,458

132,819,507

172,733,738

133,391,735

120,194,393

137,770,746

226,517,331

131,846,513

128,073,382

Cost to
Industry ($)

-13,257,244

-13,325,960

-13,409,511

-13,557,824

-13,559,050

-13,680,179

-13,699,411

-13,720,403

-13,848,356

-14,117,705

-14,166,712

-14,181,572

-14,222,867

-14,594,662

-14,955,290

-15,044,094

-15,218,786

-15,394,923

-15,446,980

-15,519,463

-15,800,962

-15,834,913

-16,181,535

-16,214,099

-16,661,645

-16,672,364

Annualized Net
Benefits ($)

Continued on next page

-92,800,706

-93,281,717

-93,866,580

-94,904,766

-94,913,347

-95,761,255

-95,895,876

-96,042,819

-96,938,492

-98,823,932

-99,166,983

-99,271,005

-99,560,069

-102,162,635

-104,687,029

-105,308,656

-106,531,504

-107,764,458

-108,128,858

-108,636,241

-110,606,735

-110,844,393

-113,270,746

-113,498,690

-116,631,513

-116,706,549

Net Benefits
($)

21

Support activities for printing

Industrial gas manufacturing

Lawn and garden equipment manufacturing

Metal can, box, and other metal container (light gauge)


manufacturing

Cut stone and stone product manufacturing

Electric lamp bulb and part manufacturing

Spring and wire product manufacturing

Poultry processing

Asphalt paving mixture and block manufacturing

Concrete pipe, brick, and block manufacturing

Surgical appliance and supplies manufacturing

Machine shops

Air purification and ventilation equipment manufacturing

Frozen food manufacturing

Relay and industrial control manufacturing

Clay product and refractory manufacturing

Military armored vehicle, tank, and tank component manufacturing

Power-driven handtool manufacturing

Pump and pumping equipment manufacturing

Sanitary paper product manufacturing

Seasoning and dressing manufacturing

Speed changer, industrial high-speed drive, and gear


manufacturing

Plumbing fixture fitting and trim manufacturing

Stationery product manufacturing

Asphalt shingle and coating materials manufacturing

Packaging machinery manufacturing

Rubber and plastics hoses and belting manufacturing

325120

333112

332430

327991

335110

332600

311615

324121

327330

339113

332710

33341A

311410

335314

327100

336992

333991

33391A

322291

311940

333612

332913

322230

324122

333993

326220

Sub-Industry Description

323120

NAICS 6

Appendix Continued

3,523,000

47,120,389

432,562

950,000

2,200,000

6,203,381

7,846,500

8,000,000

81,293,479

79,339,483

12,498,860

53,656,944

10,035,000

39,765,488

168,878,456

67,336,584

9,900,000

2,850,000

6,317,773

77,617,161

1,450,000

9,896,367

37,733,617

5,700,000

42,015,000

Subsidies to
Industry ($)

31

49

26

33

41

41

40

28

56

41

41

47

52

43

61

79

78

48

47

37

49

30

27

45

51

41

29

5,347,474,055

9,825,088,374

3,507,592,828

5,753,595,518

9,034,580,689

7,094,277,031

5,276,865,357

5,029,525,726

10,261,611,646

8,720,296,905

4,932,139,007

7,395,967,519

10,222,478,681

6,079,057,594

11,364,544,085

17,660,249,440

13,194,345,445

6,798,023,522

6,686,048,189

5,720,750,652

10,349,808,598

7,237,568,213

4,487,637,715

9,273,419,523

9,805,910,826

8,001,176,406

5,480,277,456

Upstream Subsidies to Upstream


Industries (#)
Industries ($)

74,278,506

118,421,075

72,064,571

72,787,494

74,113,390

78,386,380

80,098,857

81,167,244

155,886,136

154,026,330

75,145,924

88,470,061

130,441,537

87,864,947

118,538,121

248,035,873

147,089,601

90,778,205

87,116,360

91,495,964

163,286,998

87,296,575

85,978,714

96,218,019

125,717,716

94,427,848

134,159,493

Cost to
Industry ($)

-10,107,929

-10,185,812

-10,233,144

-10,262,499

-10,273,341

-10,311,857

-10,321,765

-10,452,463

-10,656,094

-10,669,550

-10,735,132

-10,853,029

-10,969,228

-11,118,564

-11,253,233

-11,308,202

-11,393,288

-11,554,029

-12,038,051

-12,168,313

-12,238,548

-12,263,796

-12,282,673

-12,331,665

-12,569,157

-12,675,407

-13,163,499

Annualized Net
Benefits ($)

Continued on next page

-70,755,506

-71,300,686

-71,632,008

-71,837,494

-71,913,390

-72,182,998

-72,252,357

-73,167,244

-74,592,658

-74,686,847

-75,145,924

-75,971,200

-76,784,594

-77,829,947

-78,772,633

-79,157,417

-79,753,017

-80,878,205

-84,266,360

-85,178,191

-85,669,838

-85,846,575

-85,978,714

-86,321,652

-87,984,099

-88,727,848

-92,144,493

Net Benefits
($)

22

Dental laboratories

Power, distribution, and specialty transformer manufacturing

Other furniture related product manufacturing

Switchgear and switchboard apparatus manufacturing

Wet corn milling

Boat building

Other basic organic chemical manufacturing

Lighting fixture manufacturing

Optical instrument and lens manufacturing

Soap and cleaning compound manufacturing

Glass and glass product manufacturing

Motor vehicle seating and interior trim manufacturing

All other converted paper product manufacturing

Lime and gypsum product manufacturing

Snack food manufacturing

Paperboard mills

Tire manufacturing

In-vitro diagnostic substance manufacturing

Cement manufacturing

Textile and fabric finishing and fabric coating mills

Motor vehicle transmission and power train parts manufacturing

Laminated plastics plate, sheet (except packaging), and


shape manufacturing

Soft drink and ice manufacturing

Abrasive product manufacturing

Watch, clock, and other measuring and controlling device


manufacturing

339116

335311

337900

335313

311221

336612

325190

335120

333314

325610

327200

336360

322299

327400

311910

322130

326210

325413

327310

313300

336350

326130

312110

327910

33451A

3219A0 All other wood product manufacturing

Paper mills

Sub-Industry Description

322120

NAICS 6

Appendix Continued

80,903,499

166,756,400

17,210,000

4,237,208

69,261,500

43,821,764

53,014,000

2,000,000

4,665,000

9,766,000

82,290,000

12,444,000

18,288,000

35,530,000

12,150,000

46,545,000

120,117,215

64,263,480

90,137,500

46,419,321

22,246,000

30,299,088

387,000

76,078,638

33,988,750

Subsidies to
Industry ($)

80

50

41

48

33

83

32

44

35

46

50

47

43

31

70

56

49

46

54

63

59

18

44

47

46

31

60

9,378,216,550

13,829,245,434

8,404,297,643

8,920,235,959

5,589,846,136

11,896,390,158

7,895,365,606

6,014,011,551

4,240,180,029

6,771,081,153

8,094,737,596

8,738,141,244

4,415,363,344

5,200,449,067

9,220,195,219

7,829,017,190

12,494,572,377

11,618,563,124

10,140,331,141

13,920,543,549

8,628,789,727

2,293,945,703

9,546,155,682

7,378,046,605

9,107,103,717

4,240,291,085

15,703,181,875

Upstream Subsidies to Upstream


Industries (#)
Industries ($)

132,553,857

218,597,528

69,177,225

57,994,609

124,359,429

98,951,934

108,229,154

57,625,958

62,598,099

67,977,032

140,623,210

72,636,852

60,833,759

79,268,922

97,189,829

74,137,111

108,897,475

183,420,128

127,865,893

153,867,777

110,410,792

86,830,481

96,731,739

67,986,292

143,737,569

69,206,390

104,619,973

Cost to
Industry ($)

-7,378,623

-7,405,875

-7,423,889

-7,679,629

-7,871,133

-7,875,739

-7,887,879

-7,946,565

-8,276,157

-8,315,862

-8,333,316

-8,598,979

-8,690,537

-8,711,560

-8,808,547

-8,855,302

-8,907,496

-9,043,273

-9,086,059

-9,104,325

-9,141,639

-9,226,354

-9,490,379

-9,657,042

-9,665,562

-9,886,627

-10,090,175

Annualized Net
Benefits ($)

Continued on next page

-51,650,358

-51,841,128

-51,967,225

-53,757,401

-55,097,929

-55,130,170

-55,215,154

-55,625,958

-57,933,099

-58,211,032

-58,333,210

-60,192,852

-60,833,759

-60,980,922

-61,659,829

-61,987,111

-62,352,475

-63,302,912

-63,602,414

-63,730,277

-63,991,471

-64,584,481

-66,432,651

-67,599,292

-67,658,931

-69,206,390

-70,631,223

Net Benefits
($)

23

Printing

Audio and video equipment manufacturing

Pulp mills

Cookie, cracker, pasta, and tortilla manufacturing

Irradiation apparatus manufacturing

Breakfast cereal manufacturing

Wineries

Wiring device manufacturing

Ready-mix concrete manufacturing

Breweries

Toilet preparation manufacturing

Flavoring syrup and concentrate manufacturing

Other fabricated metal manufacturing

Millwork

Upholstered household furniture manufacturing

Alumina refining and primary aluminum production

Nonferrous metal foundries

Flour milling and malt manufacturing

Fruit and vegetable canning, pickling, and drying

Paper bag and coated and treated paper manufacturing

Ice cream and frozen dessert manufacturing

Plastics packaging materials and unlaminated film and sheet


manufacturing

Motor and generator manufacturing

Fabric mills

Printing ink manufacturing

Bread and bakery product manufacturing

All other miscellaneous electrical equipment and component manufacturing

Apparel manufacturing

334300

322110

3118A0

334517

311230

312130

335930

327320

312120

325620

311930

33299B

321910

337121

33131A

331520

311210

311420

322220

311520

326110

335312

313200

325910

311810

335999

315000

Sub-Industry Description

323110

NAICS 6

Appendix Continued

43,500,000

163,568,665

12,873,771

70,676,750

52,765,999

51,382,295

122,376,837

4,375,000

43,682,500

34,678,000

19,911,425

35,305,092

18,670,151

34,310,000

95,136,187

134,648,074

3,385,000

150,205,117

5,600,000

385,114

136,103,037

59,372,500

270,000

54,263,159

31,635,000

35,497,236

47,761,926

Subsidies to
Industry ($)

33

52

53

25

39

63

46

41

43

50

18

43

36

55

57

71

31

55

45

42

52

32

37

42

45

31

49

64

4,188,987,174

14,036,921,799

8,705,419,482

8,361,497,173

5,804,907,256

8,804,915,635

9,259,066,860

4,205,156,946

6,818,940,801

12,652,969,557

2,029,551,977

9,548,950,242

6,887,155,228

7,688,895,135

14,204,145,553

17,238,300,588

2,798,066,042

12,995,138,017

6,423,559,023

6,147,868,188

9,983,247,087

7,665,151,683

4,174,998,857

6,289,004,966

4,564,944,618

6,005,705,527

7,192,244,609

15,402,521,869

Upstream Subsidies to Upstream


Industries (#)
Industries ($)

79,028,224

200,344,081

49,825,538

108,616,899

90,823,506

89,705,778

160,761,388

43,636,713

83,715,685

74,969,932

60,961,676

76,990,295

60,421,157

76,300,633

137,770,083

177,368,583

46,303,740

193,125,409

48,836,505

44,038,067

179,788,542

103,162,235

45,508,689

102,850,384

49,164,615

82,189,425

86,487,595

99,067,586

Cost to
Industry ($)

-5,075,461

-5,253,631

-5,278,824

-5,420,021

-5,436,787

-5,474,783

-5,483,507

-5,608,816

-5,719,026

-5,755,990

-5,864,322

-5,955,029

-5,964,429

-5,998,662

-6,090,557

-6,102,930

-6,131,249

-6,131,470

-6,176,644

-6,236,136

-6,240,786

-6,255,676

-6,462,670

-6,941,032

-7,023,516

-7,222,061

-7,284,337

-7,329,380

Annualized Net
Benefits ($)

Continued on next page

-35,528,224

-36,775,416

-36,951,767

-37,940,149

-38,057,507

-38,323,483

-38,384,551

-39,261,713

-40,033,185

-40,291,932

-41,050,251

-41,685,204

-41,751,006

-41,990,633

-42,633,896

-42,720,509

-42,918,740

-42,920,292

-43,236,505

-43,652,953

-43,685,505

-43,789,735

-45,238,689

-48,587,224

-49,164,615

-50,554,425

-50,990,359

-51,305,660

Net Benefits
($)

24

Ship building and repairing

Biological product (except diagnostic) manufacturing

Fluid milk and butter manufacturing

Other rubber product manufacturing

Sugar and confectionery product manufacturing

Other electronic component manufacturing

Petroleum refineries

Miscellaneous nonmetallic mineral products

Seafood product preparation and packaging

Medicinal and botanical manufacturing

Storage battery manufacturing

Primary smelting and refining of nonferrous metal (except


copper and aluminum)

Distilleries

Paperboard container manufacturing

Sporting and athletic goods manufacturing

Cheese manufacturing

Tobacco product manufacturing

Dry, condensed, and evaporated dairy product manufacturing

Guided missile and space vehicle manufacturing

Soybean and other oilseed processing

All other food manufacturing

Primary smelting and refining of copper

Fats and oils refining and blending

Communication and energy wire and cable manufacturing

Copper rolling, drawing, extruding and alloying

Nonferrous metal (except copper and aluminum) rolling,


drawing, extruding and alloying

Other textile product mills

325414

31151A

326290

311300

33441A

324110

327999

311700

325411

335911

331419

312140

322210

339920

311513

312200

311514

336414

31122A

311990

331411

311225

335920

331420

331490

314900

Sub-Industry Description

336611

NAICS 6

Appendix Continued

91,180,684

66,820,000

13,821,773

39,412,471

51,640,000

78,461,200

32,250,000

189,533,244

40,205,389

16,000,000

1,913,000

113,037,159

53,170,000

6,740,000

9,927,500

55,977,000

49,351,500

26,090,000

33,466,000

78,703,301

152,078,263

21,829,500

87,337,500

24,780,000

25,750,000

220,072,280

Subsidies to
Industry ($)

35

46

43

46

27

16

43

21

24

45

44

49

63

46

23

13

42

32

26

42

39

67

47

52

49

34

66

6,333,223,726

9,754,207,215

8,903,715,946

7,094,988,169

7,983,272,707

2,850,025,229

5,768,305,009

7,076,085,770

8,583,697,918

4,176,671,551

4,523,609,587

4,525,763,755

8,845,108,153

13,181,037,336

2,389,437,095

2,307,422,560

6,385,487,228

4,346,213,655

3,441,847,040

4,834,918,693

10,826,299,965

16,972,330,338

9,057,620,039

7,398,302,823

5,610,153,617

9,146,788,235

22,333,844,248

Upstream Subsidies to Upstream


Industries (#)
Industries ($)

88,692,449

64,804,734

14,550,094

44,448,272

59,130,398

8,024,418

87,701,569

41,713,370

200,337,671

52,165,335

32,419,961

20,594,180

132,429,697

73,767,729

30,274,459

36,072,129

83,240,547

76,702,910

55,223,014

63,062,403

108,551,618

181,940,670

52,077,108

119,614,664

57,591,949

59,574,512

254,981,352

Cost to
Industry ($)

355,462

287,895

-104,046

-719,400

-1,070,057

-1,146,345

-1,320,053

-1,351,910

-1,543,490

-1,708,564

-2,345,709

-2,668,740

-2,770,363

-2,942,533

-3,362,066

-3,734,947

-3,894,792

-3,907,344

-4,161,859

-4,228,058

-4,264,045

-4,266,058

-4,321,087

-4,611,023

-4,687,421

-4,832,073

-4,987,010

Annualized Net
Benefits ($)

Continued on next page

2,488,236

2,015,266

-728,321

-5,035,801

-7,490,398

-8,024,418

-9,240,369

-9,463,370

-10,804,427

-11,959,945

-16,419,961

-18,681,180

-19,392,538

-20,597,729

-23,534,459

-26,144,629

-27,263,547

-27,351,410

-29,133,014

-29,596,403

-29,848,317

-29,862,407

-30,247,608

-32,277,164

-32,811,949

-33,824,512

-34,909,072

Net Benefits
($)

25

959,105,829
324,699,655
392,052,848

Fertilizer manufacturing

Aluminum product manufacturing from purchased aluminum

Dental equipment and supplies manufacturing

Petrochemical manufacturing

Computer terminals and other computer peripheral equipment manufacturing

Other animal food manufacturing

Other petroleum and coal products manufacturing

Plastics material and resin manufacturing

Other motor vehicle parts manufacturing

Valve and fittings other than plumbing

Pharmaceutical preparation manufacturing

Animal (except poultry) slaughtering, rendering, and


processing

Electromedical and electrotherapeutic apparatus manufacturing

Other plastics product manufacturing

Material handling equipment manufacturing

Iron and steel mills and ferroalloy manufacturing

Air conditioning, refrigeration, and warm air heating equipment manufacturing

Aircraft engine and engine parts manufacturing

Plate work and fabricated structural product manufacturing

Veneer, plywood, and engineered wood product manufacturing

All other miscellaneous manufacturing

33131B

339114

325110

33411A

311119

324190

325211

336390

33291A

325412

31161A

334510

326190

333920

331110

333415

336412

3259A0 All other chemical product and preparation manufacturing

Electronic computer manufacturing

325310

334111

332310

321200

339990

402,484,391

417,910,407

446,828,415

334,493,730

334,013,376

301,095,758

276,733,500

240,948,351

584,102,203

156,737,500

197,678,651

196,855,889

181,373,000

210,847,000

121,313,870

198,967,314

183,439,166

75,680,000

79,000,000

106,056,253

118,293,264

Sawmills and wood preservation

321100

37,741,648

Subsidies to
Industry ($)

Jewelry and silverware manufacturing

Sub-Industry Description

339910

NAICS 6

Appendix Continued

75

39

54

47

64

49

73

58

63

92

55

29

47

57

107

56

35

35

66

36

40

40

27

33

40

12,921,704,439

6,758,221,829

10,055,405,234

9,738,001,762

16,685,580,871

70,825,810,027

17,125,290,082

10,585,493,771

10,983,680,418

17,102,636,040

9,775,228,319

3,951,433,915

10,281,508,431

10,705,935,790

13,384,388,516

10,537,567,206

9,658,079,398

3,496,989,961

13,262,551,957

12,432,257,605

6,599,612,901

8,889,724,658

4,202,648,788

9,915,454,347

9,184,500,280

Upstream Subsidies to Upstream


Industries (#)
Industries ($)

193,532,087

214,138,393

262,235,779

219,364,969

159,242,011

806,532,287

186,667,431

209,456,900

177,670,413

155,466,110

147,199,182

493,014,913

88,694,297

140,318,491

144,577,250

136,774,889

172,339,287

87,702,441

171,870,564

157,155,205

60,629,716

65,124,586

97,908,961

114,415,276

34,841,731

Cost to
Industry ($)

29,850,329

29,110,288

26,370,376

24,669,697

23,636,806

21,796,220

21,118,043

17,793,782

17,632,192

17,323,913

13,392,738

13,012,470

9,720,458

8,194,309

7,468,377

6,371,159

5,501,102

4,801,633

3,870,964

3,754,852

2,150,041

1,982,202

1,163,899

553,998

414,274

Annualized Net
Benefits ($)

Continued on next page

208,952,304

203,772,014

184,592,635

172,687,878

165,457,644

152,573,542

147,826,300

124,556,477

123,425,345

121,267,390

93,749,169

91,087,290

68,043,203

57,360,160

52,278,638

44,598,111

38,507,713

33,611,429

27,096,750

26,283,962

15,050,284

13,875,414

8,147,291

3,877,987

2,899,917

Net Benefits
($)

26

2,012,715,441

5,003,595,978

50,470,218,209

Light truck and utility vehicle manufacturing

336112

4,229,082,082

All Manufacturing (except Aircraft)

Broadcast and wireless communications equipment

334220

1,875,820,392

42,795,832,043

Farm machinery and equipment manufacturing

333111

1,602,946,275

47 Winners

Cutting and machine tool accessory, rolling mill, and other


metalworking machinery

33351B

1,326,193,965

7,674,386,166

Construction machinery manufacturing

333120

1,536,823,820

189 Victims

Semiconductor machinery manufacturing

333295

943,062,837

5,213,669,271

Automobile manufacturing

336111

1,223,103,488

Turbine and turbine generator set units manufacturing

Railroad rolling stock manufacturing

336500

900,927,833

333611

Semiconductor and related device manufacturing

334413

848,097,567

Power boiler and heat exchanger manufacturing

Industrial process furnace and oven manufacturing

333994

462,578,498

332410

Heavy duty truck manufacturing

336120

506,351,655

4,018,854,850

Surgical and medical instrument manufacturing

339112

314,505,976

Mining and oil and gas field machinery manufacturing

Fiber, yarn, and thread mills

313100

417,893,571

333130

Vending, commercial laundry, and other commercial and


service industry machinery

33331A

418,342,321

2,267,250,219

Air and gas compressor manufacturing

333912

637,563,302

Subsidies to
Industry ($)

33399A Other general purpose machinery manufacturing

Other industrial machinery manufacturing

Sub-Industry Description

33329A

NAICS 6

Appendix Continued

52

50

60

68

77

63

63

53

66

62

76

51

77

34

79

58

25

68

59

73

20,076,541,365

14,955,026,925

15,767,856,787

16,641,398,069

11,226,069,033

15,308,127,191

17,020,611,257

13,779,789,185

13,723,470,333

17,330,391,477

12,100,136,870

10,476,230,260

17,450,743,974

8,515,100,816

12,127,190,320

10,958,119,396

5,344,266,708

16,045,329,966

11,350,611,887

17,341,350,270

Upstream Subsidies to Upstream


Industries (#)
Industries ($)

4,497,367,945

4,100,400,806

3,693,061,581

1,991,583,916

1,935,695,607

1,671,569,277

1,637,534,951

1,290,821,216

1,117,296,304

966,709,467

869,388,160

806,395,577

626,257,729

482,344,710

396,254,754

308,967,735

260,452,107

237,805,960

227,942,544

226,588,718

Net Benefits
($)

642,481,135

585,771,544

527,580,226

284,511,988

276,527,944

238,795,611

233,933,564

184,403,031

159,613,758

138,101,352

124,198,309

115,199,368

89,465,390

68,906,387

56,607,822

44,138,248

37,207,444

33,972,280

32,563,221

32,369,817

Annualized Net
Benefits ($)

29,530,521,412 4,218,645,916
40,420,380,762 10,049,837,447 1,435,691,064

13,265,310,631

27,155,070,131 -19,480,683,965 -2,782,954,852

716,301,327

903,195,172

325,793,269

275,666,304

77,019,834

2,557,512,806

238,285,441

312,125,059

208,897,661

570,114,353

73,674,677

416,707,910

274,670,104

365,752,857

66,323,743

197,383,919

54,053,869

180,087,611

190,399,777

410,974,584

Cost to
Industry ($)

27

28
NOTES
1. Testimony of Veronique de Rugy before the
U.S. Congress, House of Representatives, Committee on Financial Services, June 25, 2014, p. 8,
http://mercatus.org/sites/default/files/deRugyexim-testimony-062314.pdf.
2. For a more comprehensive presentation of
arguments in favor of shutting down the ExportImport Banks, see, for example: Sallie James,
Time to X Out the Ex-Im Bank, Cato Institute
Trade Policy Analysis no. 47, July 6, 2011, http://
object.cato.org/sites/cato.org/files/pubs/pdf/tpa047.pdf; Veronique de Rugy and Andrea Castillo,
The US Export-Import Bank: A Review of the
Debate over Reauthorization, Mercatus Center
Research, July 16, 2014, http://mercatus.org/sites/
default/files/deRugy-Ex-ImReview.pdf.
3. See Daniel J. Ikenson, Washington Post HalfHeartedly Seeks Clarity about Export-Import
Bank Jobs Claims, Cato at Liberty Blog Post,
August 15, 2014, http://www.cato.org/blog/wash
ington-post-half-heartedly-seeks-clarity-aboutexport-import-bank-jobs-claims.
4. For an explanation of Ex-Ims methodology for
determining the value of exports and the number
of jobs supported by its operations, see ExportImport Bank: More Detailed Information about
Its Jobs Calculation Methodology Could Improve Transparency, United States Government
Accountability Office, Report to Congressional
Committees, May 2013.
5. Export-Import Bank of the United States, FFATA (Federal Funding Accountability and Transparency Act) Transaction Information, 20072013,
http://www.exim.gov/about/library/foia/Frequent
ly-Requested-Reports-and-Information.cfm.
6. United States Bureau of the Census, http://
www.census.gov/eos/www/naics/.
7. The NAICS coding system has gone through a
few revisions over the years, most recently in 2012.
The 2007 version was used because that version is

the basis for the most up-to-date input-output tables, produced by the Bureau of Economic Analysis, which are central to this analysis.
8. Aircraft production (NAICS 336411) was excluded to allow for a clearer view of what is happening in typical industries, as inclusion of aircraft
subsidies, which accounted for more than half of
the subsidies to manufacturers, would skew that
picture.
9. See Daniel J. Ikenson, Steel Trap: How Subsidies and Protectionism Weaken the U.S. Steel
Industry, Cato Institute Trade Briefing Paper no.
14, September 1, 2002.
10. Office of the U.S. Trade Representative, Press
Office, WTO Case Challenging Chinas Export
Restraints on Raw Material Inputs, Fact Sheet,
June 2009, http://www.ustr.gov/about-us/press-of
fice/fact-sheets/2009/june/wto-case-challeng
ing-chinas-export-restraints-raw-materi.
11. See Daniel Griswold, The Miscellaneous Tariff Bill: A Blueprint for Future Trade Expansion,
Cato Institute Trade Briefing Paper no. 30, September 9, 2010.
12. President Barack Obama, The White House,
Office of the Press Secretary, Remarks by the
President at the Signing of the Manufacturing Enhancement Act of 2010, August 11, 2010.
13. Bureau of Economic Analysis, Survey of Current Business, International Transactions Tables,
Table 1.2, http://www.bea.gov/scb/pdf/2014/07%20
July/0714_international_transactions_accounts_
tables.pdf.
14. This is a link to the BEAs I-O Use Table, which
is too large to reproduce in this report. http://www.
bea.gov/industry/xls/iouse_before_redefinitions_
pur_2007_detail.xlsx. References will be made
in the text to this table for some methodological
descriptions. This file contains detail-level Use
Table before redefinitions data from the Industry
Input-Output (I-O) benchmark accounts for the
year 2007. These data were released on January

29
23, 2014, as part of the comprehensive revision to
the industry economic accounts (IEAs). Statistics were prepared with methodologies that are
unique to the I-O accounts and are for industries
defined according to the 2007 North American
Industry Classification System (NAICS).
15. This is calculated as the sum of the total intermediate column ($11.7 trillion in cell OA392) di-

vided by the sum of the total commodity output


column ($26.2 trillion in cell ON397).
16. This can be determined by aggregating the
total intermediate column (Column OA) for
all manufacturing industries (Rows 43-279) and
dividing that figure by the total commodity output column (Column ON) aggregated for rows
43-279.

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