Strengthening Exports Against China Act

This bill would allow the Export-Import Bank of the United States (EXIM) to exclude specific types of financing from the calculations used to determine its official default rate. Under the proposal, EXIM could exempt loans and guarantees provided through the China and Transformational Exports Program, as well as financing for U.S. exporters competing against foreign entities that are currently sanctioned or on the Department of Commerce’s Entity List. By excluding these transactions, the bill aims to prevent EXIM from reaching the 2% default rate threshold that triggers an immediate freeze on its lending capacity.

This bill affects the Export-Import Bank of the United States (EXIM) by modifying how it calculates default rates for its lending cap. It specifically impacts U.S. exporters participating in the China and Transformational Exports Program, including those in sectors such as artificial intelligence, biotechnology, and wireless communications. Additionally, the bill affects U.S. exporters that compete against foreign entities listed on the Department of Commerce’s Entity List or those sanctioned by the Department of the Treasury.

• Exemption for China and Transformational Exports Program financing. The bill allows the Export-Import Bank (EXIM) to exclude financing provided under the China and Transformational Exports Program from its statutory default rate calculations. This program supports U.S. leadership in sectors like artificial intelligence, biotechnology, and wireless communications to compete with China.
• Exemption for competition with entities on the Commerce Entity List. EXIM may exclude from its default rate cap any financing provided to U.S. exporters that are competing against foreign entities listed by the Bureau of Industry and Security. These entities are typically identified as being involved in activities contrary to U.S. national security or foreign policy interests.
• Exemption for competition with Treasury-sanctioned individuals or entities. The bill permits EXIM to omit financing from its default rate calculations when U.S. exporters are competing with products or services offered by foreign individuals or entities sanctioned by the Office of Foreign Assets Control.
• Modification of default rate cap constraints. By excluding specific high-risk or strategic transactions from the default rate calculation, the bill aims to prevent EXIM from reaching the 2% default rate threshold that triggers an immediate freeze on its lending capacity.

The bill modifies the operational requirements of the Export-Import Bank of the United States (EXIM) by creating exemptions to its statutory default rate cap. Specifically, it allows EXIM to exclude financing provided under the China and Transformational Exports Program, as well as financing for exporters competing against entities on the Department of Commerce Entity List or those sanctioned by the Department of the Treasury, from the calculations that trigger a lending cap freeze.

The bill aims to enable the Export-Import Bank of the United States to provide financing to U.S. exporters facing competition from China or sanctioned foreign entities without triggering mandatory lending caps. It achieves this by excluding financing for the China and Transformational Exports Program and transactions involving competitors on U.S. restricted lists from the bank's official default rate calculations.