The Export-Import Bank of the United States (EXIM) is accepting information on the level of U.S. and foreign content in U.S. exports in the following transformational export sectors through May 14: biomedical sciences; wireless communications equipment (5G); quantum computing; renewable energy, energy efficiency, and energy storage; semiconductors and semiconductor machinery manufacturing; emerging financial technologies; water treatment and sanitation; and high-performance computing.
New content principles for these sectors—approved in Dec. 2020—allow EXIM to support eligible transformational export transactions, which have a U.S. content level of 51 percent or more. This is down from the previous level of 85 percent for medium and long-term transactions. This means that those such transactions may now receive EXIM support if they contain up to 49 percent of eligible foreign content, which is increased by 15 percent.
According to a notice by EXIM, a narrow implementation of the transformational export area principles would limit EXIM’s support of foreign content to what is currently called “eligible foreign content”. This is foreign content that is included in a U.S. export contract and shipped from the U.S. However, an expansive implementation would allow EXIM to support goods in U.S. exporter’s contract that ship directly from a third country to a foreign buyer.
EXIM is requesting commentary on:
- Average U.S. exports over the last five years and expected U.S. export values over the next five years
- To the extent export sales have been falling or expected to fall, please explain why.
- A description of the current supply chain in your industry/company, including:
- The percent of foreign content included in your exports/export contracts.
- Of the foreign content, the percent from the People’s Republic of China in your exports/export contracts.
- The importance, if any, in supporting foreign content shipped directly from other countries to foreign buyers.
- Why such foreign content is unable to be sourced from the U.S. or to be incorporated into products in the U.S.
- The timing and cost implications of requiring U.S. shipping for shipments from foreign ports directly to the buyer.
- The feasibility of an EXIM prohibition on covering content from the People’s Republic of China.
- Including the impact of prohibiting use of shipping from the People’s Republic of China.
Any comments are due by May 14. For further questions, please contact Mohawk Global Trade Advisors.