The Export-Import Bank of The United States said its board voted to lower its domestic content threshold from 85 per cent to 51 per cent for projects in 10 industries seen as key to improving US competitiveness against China.
Kimberly Reed, Exim’s chairman, said the change would make it easier for the bank to support deals in areas such as 5G wireless technology that could not meet previous rules.
“Congress wants us to promote US leadership in the world relative to the People’s Republic of China and launch 10 transformational export industries,” Mr Reid said at an online event hosted by the Council on Foreign Relations shortly after the board meeting.
The 10 areas include artificial intelligence, biotechnology, biomedical science, 5G wireless communications technology, quantum computing, renewable energy, energy efficiency and storage, semiconductors, machinery manufacturing, financial technology, water treatment and sanitation, and high performance computing.
Reid said the changes should help the Ex-Im Bank win more deals for U.S. companies. He noted that trump administration officials and congress are concerned about China’s “One Belt And One Road” initiative and what she called “debt trap diplomacy.”
The new rules would make it easier for projects or purchases to qualify for Exim bank financing if they meet the 51% U.S. threshold and certain other requirements.
Exim will be able to approve the deal even if it falls short of the 51 per cent threshold if it enhances US leadership relative to China and exporters provide a written plan to expand US jobs in the supported sector over the next three to five years.
Mr Reid said export-Import Bank financing could have a big impact. He noted that the bank’s support for a large liquefied natural gas project in Mozambique had helped the country move away from Russian and Chinese partners and towards US suppliers.