Outgoing Export-Import Bank of the United States (EXIM) Chairman Kimberly Reed urged the Biden administration to build on Trump‘s gains by pushing to neutralize Chinese export subsidies to make U.S. companies more competitive.
On Monday (Jan. 18), the chairman of the Export-Import Bank of the United States (EXIM) urged the Biden administration to build on Trump’s gains and continue to push for the elimination of Chinese export subsidies to boost the competitiveness of U.S. companies.
EXIM President Kimberly Reed will leave her post on Wednesday after 20 months in office. She told Reuters that she believes restoring the bank’s full lending capacity has strengthened the competitiveness of U.S. companies and helped level the playing field, but there is more work to be done.
In 2015, congressional Republicans tried to shut down EXIM, arguing that it was just “corporate welfare” for large exporters like Boeing, General Electric and Caterpillar.
By blocking board nominations, they kept EXIM from funding major projects like power plants and commercial aircraft for four years. But Trump changed his previous opposition when he took office and worked with Democrats in Congress to support EXIM.
In late 2019, EXIM received a seven-year reauthorization, the longest it has ever received in its 87-year history, and part of a spending bill that won strong bipartisan support.
The bank now has about $39 billion left in programs that support about 147,000 jobs. Reid said she believes President-elect Biden understands the challenges posed by China (Communist Party of China), which often offers aggressive financing terms to close big business deals.
The Trump administration then pushed back hard against the Chinese Communist Party on technology and trade, and used EXIM financing to gain access to countries that rely heavily on trade with China.
Reid said, “Throughout this administration, we have been very tough and visible with China (the Chinese Communist Party), and our country is now in a stronger position, and I hope President-elect Biden will continue that effort.”
She also said U.S. companies face increasing competition – as many as 116 countries now have their own export credit agencies, compared to 85 in 2016. But global buyers told her they are happy to see EXIM supporting deals again.
The newly authorized China program, authorized by Congress, requires EXIM to use 20 percent of its full financing authority, or $27 billion, to provide loans, guarantees and insurance at rates and terms that are more competitive with those offered by the Communist Party.
Reid said the financing targets key sectors including artificial intelligence, biotechnology, wireless communications equipment (including 5G), quantum computing, water treatment, renewable energy, and emerging financial technologies.
According to EXIM’s annual report, which will be released Tuesday (19), the bank authorized a total of $5.4 billion in the fiscal year ending Sept. 30, 2020, supporting more than $10.8 billion in U.S. exports and about 37,000 U.S. jobs.
Reid said EXIM also approved one of the largest deals in its history in 2019 – $4.7 billion in aid for a liquefied natural gas project in Mozambique, knocking back China and Russia who were set to fund the deal.
EXIM reported that they also focused on boosting exports of U.S. goods and services in sub-Saharan Africa, particularly in the information and communications technology, health care, and agriculture segments.
Large projects include a $91.5 million loan guarantee to support the export of design engineering and construction services to Senegal, a deal that will bring electricity to some 330,000 people in more than 400 villages.
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