EXIM to Determine Extent of Applicability of More Flexible Content Policies for U.S. Exports in 10 Transformational Areas Competing with China Abroad
FOR IMMEDIATE RELEASE April 26, 2021
Office of Communications (202-565-3204)
WASHINGTON – The Federal Register has posted a notice for public comment on the implementation of changes to the content policies of the Export-Import Bank of the United States (EXIM) as applied to the agency’s “Program on China and Transformational Exports.” On December 17, 2020, EXIM’s Board of Directors approved new content principles for 10 congressionally defined transformational areas as part of the program. The agency is currently seeking comment from U.S. exporters and other stakeholders on the nature and scope of foreign content in U.S. supply chains. EXIM’s goal is to understand whether in an increasingly competitive landscape the current implementation properly supports U.S. exports and jobs in the transformational export areas.
Under the board-approved principles, full EXIM support is available for eligible transformational export transactions having a U.S. content level of 51 percent or more. EXIM’s standard content policy for medium- and long-term transactions reduces the amount of financing available for transactions with less than 85 percent U.S. content. The new content principles also allow EXIM to consider full support for transactions with less than 51 percent U.S. content if certain pre-requisites are met, including the exporter providing an acceptable actionable written plan to meaningfully increase U.S.-based jobs in the next three to five years and at least one of seven factors being applicable to the transaction. Finally, EXIM’s board also made Chinese content presumptively ineligible for transactions financed under the transformational exports content policy.
“This information request will play a key role in helping EXIM fully implement the December board action. EXIM is exploring the supply chains of the 10 transformational areas and is trying empirically to determine what are feasible ways to maximize the jobs within each area under the program,” said EXIM Acting First Vice President and Vice Chairman James C. Cruse.
The current narrow implementation of the transformational export content principles would limit EXIM’s support of foreign content to what is currently called “eligible foreign content” or foreign content that is included in a U.S. export contract and shipped from the United States. Furthermore, for financings covered by the new principles, all Chinese content would be considered “ineligible foreign content,” meaning that the dollar value would be subtracted from the value of the U.S. export contract that EXIM is financing. A more expansive implementation would allow for EXIM to support goods in a U.S. exporter’s contract (including those supplied by foreign subsidiaries and sub-suppliers) that ship directly from a third country to a foreign buyer.
The Export-Import Bank of the United States (EXIM) is the nation’s official export credit agency with the mission of supporting American jobs by facilitating U.S. exports. To advance American competitiveness and assist U.S. businesses as they compete for global sales, EXIM offers financing, including export credit insurance, working capital guarantees, loan guarantees, and direct loans. As an independent federal agency, EXIM contributes to U.S. economic growth by supporting tens of thousands of jobs in exporting businesses and their supply chains across the United States. Since 1992, EXIM has generated more than $9 billion for the U.S. Treasury for repayment of U.S. debt. Learn more at www.exim.gov.