New US trade may suffer at the hands of congress
If congress fails to act on the reauthorisation of the US Export-Import Bank (US Exim), all new US trade activity will grind to a halt, said US Exim president Fred Hochberg at the bank’s 37th annual conference.
Hochberg said that over 60 export credit agencies around the world are working to expand their footprint and increase their activity.
“However, some in congress don’t accept this. They want us to move in the opposite direction. And unless they act, our authorisation expires on May 31.”
Hochberg reassured the audience that whatever the outcome, the current obligations of the US Exim will not be affected, stating that loans, guarantees and insurance will still to be backed by the US government.
The bank’s has been working on a temporary authority since the expiration of its charter on September 30 last year. The latest extension will expire on May 31.
US Exim hopes to increase its exposure cap to US$135bn. The final approval is awaiting a vote by the full house or senate.
However, without the reauthorisation, many American companies – large and small – will find themselves at a huge disadvantage, he says.
“This administration is fighting hard for US companies and their workers, and US Exim is critical to that fight. But a vocal few oppose the bank. Some don’t like our government financing US exports to foreign buyers, others don’t get why American companies that produce some of the best products in the world need any help at all,” Hochberg remarks.
Last year US Exim provided a record US$33bn in export finance to support over 3,600 companies. Nearly 90% of these transactions were for small businesses.