Strengthening Exports Against China Act
- Sponsor
- Sen. Cortez Masto, Catherine [D-NV]
- Committees
- Banking, Housing, and Urban Affairs Committee (primary)
- Last action
- Mar 26, 2026
Bottom line
The bill aims to enhance the Export-Import Bank's ability to finance U.S. exports, particularly those countering Chinese influence or involving critical technologies, by adjusting how default rates are calculated to avoid statutory lending limits.
What it actually does
This bill amends the Export-Import Bank Act of 1945 to modify how the Export-Import Bank (EXIM) calculates its default rate. It specifically excludes certain financing from being counted towards the default rate calculation if that financing supports U.S. exports that compete with or replace products/services from entities on U.S. government sanction lists (like the Entity List or SDN list) or if it falls under EXIM's Program on China and Transformational Exports. This change aims to prevent a higher default rate from triggering a lending cap, thereby allowing EXIM to continue supporting strategic exports.
Proponents argue
Proponents argue that this bill is crucial for strengthening the competitiveness of U.S. exports, especially in strategic sectors where the U.S. seeks to counter economic influence from adversarial nations like China. By excluding certain high-priority financing from default rate calculations, the bill ensures that EXIM can continue to support critical projects without being constrained by a lending cap, thereby safeguarding American jobs and national security interests. They emphasize that this flexibility is necessary to compete effectively in a global market increasingly shaped by state-backed enterprises.
Opponents contend
Opponents might argue that this bill could expose U.S. taxpayers to greater risk by allowing EXIM to undertake potentially riskier loans without the full accountability of its default rate. They may contend that manipulating default rate calculations undermines fiscal prudence and could lead to a less transparent assessment of EXIM's financial health. Critics might also suggest that it creates a loophole that could be exploited, potentially leading to increased defaults that are simply hidden from the public eye, rather than truly mitigating risk.
The bill text is very short and straightforward, making it highly accessible for any reader to understand its core provisions quickly.
Section 2, amending Section 6(a)(3) of the Export-Import Bank Act of 1945
Exclusion of Certain Financing from EXIM Default Rate Calculation
This provision amends the Export-Import Bank Act to change how the EXIM Bank calculates its default rate. Specifically, it states that if EXIM provides financing for projects that either replace or compete with products/services from entities on U.S. government sanction lists (like those maintained by the Bureau of Industry and Security or the Office of Foreign Assets Control) or if the financing is part of EXIM's Program on China and Transformational Exports, then any defaults on these specific loans will not count towards EXIM's overall default rate calculation. This is significant because a high default rate can trigger a statutory lending cap for EXIM.
Supporters argue
Supporters argue that this exclusion is vital for national economic security, allowing EXIM to aggressively counter state-sponsored economic activities by adversaries without being artificially constrained. They contend that these strategic loans, while potentially higher risk, serve a critical geopolitical purpose that outweighs the traditional financial risk assessment, and that the current default rate calculation mechanism was not designed to account for such strategic imperatives.
Critics contend
Critics might argue that this provision masks the true financial health and risk exposure of EXIM, potentially leading to a false sense of security regarding the bank's operations. They may contend that it creates a moral hazard, encouraging EXIM to take on excessively risky loans in the name of strategic competition, ultimately placing a greater burden on taxpayers if those loans default.
Tradeoffs
The provision balances the goal of enhancing U.S. competitiveness and national security through strategic export financing against concerns about fiscal responsibility and transparency in government lending programs. It trades a more conservative, risk-averse approach to EXIM's lending cap for greater flexibility in countering geopolitical rivals.