The United States government is rolling out measures to revitalise American manufacturing, secure critical supply chains and scale innovative technologies, in a bid to create new domestic and export opportunities for businesses located in the world’s largest national economy.


Trade overview

2021 was a record year for trade in the United States, according to statistics from the US Department of Commerce, which show that exports of goods and services hit almost US$2.5tn, up US$394bn, after decreasing nearly US$400bn in 2020.

According to economists in the Office of Trade and Economic Analysis at the International Trade Administration (ITA), the US set new records with 57 export partners, including Mexico, China, South Korea and Germany last year. The top four US goods export destinations remained unchanged, and all exceeded their 2019 export levels. Canada and Mexico continued to be the largest markets for US exports, followed by China and Japan.

The ITA economists further note that the trade data provides a good opportunity to reflect on the “remarkable resilience” of US exporters in 2021, despite trade disruptions including “supply and demand shake-ups from Covid-19, as well as other shocks like the Texas winter storms and Hurricane Ida”.


Presidential actions and policies

Over the last few years, in response to the pandemic, climate shocks, and geopolitical and economic competition, the US government has made great strides in its commitment to strengthen the country’s supply chains and boost local manufacturing.

At the start of 2021, then-newly elected US President Joe Biden signed an executive order to review vulnerabilities in US supplies of four key products: semiconductor manufacturing and advanced packaging; high-capacity batteries, including electric vehicle (EV) batteries; pharmaceuticals and active pharmaceutical ingredients; and critical minerals and other strategic materials.

“Resilient American supply chains will revitalise and rebuild domestic manufacturing capacity, maintain America’s competitive edge in research and development, and create well-paying jobs,” President Biden stated in his Executive Order on America’s Supply Chains, released in February last year.

In mid-June 2021, 100 days later, the US government released the findings of its review, providing an outline of the actions it would take to build more secure and resilient supply chains, which included more than two dozen recommendations for strengthening supply chains in each of the four key areas, and pledging billions of dollars’ worth of financial support.

Mapped out in the review’s key recommendations was the need to examine the role that the Export-Import Bank of the United States (US Exim), the official export credit agency of the US federal government, can play in reshaping the nation’s production and innovation capabilities and supporting US manufacturing of products.

On the back of those recommendations, in April this year, US Exim formally launched its ‘Make More in America Initiative’, a new tool aimed at unlocking financing for local manufacturing by making the agency’s range of existing medium and long-term loans and loan guarantees available for export-oriented domestic manufacturing products.

In its launch statement, US Exim noted that the initiative will incentivise applications in environmentally beneficial, small business and transformational export transactions, including semiconductors, biotech and biomedical products, renewable energy and energy storage.

“A lot of these initiatives and investments that we’re seeing from across the government, including the Make More in America Initiative by US Exim, are being driven by necessity as supply chains become more fragmented and companies look to develop resilience and security, while still maintaining efficiency and cost competitiveness,” says Lynée Bradley, North America head of export and agency finance at Citi Treasury and Trade Solutions in New York.

“At Citi, we are having interesting conversations with companies that are seeking financing to support the expansion of their manufacturing capabilities to increase their exports. Companies are also needing working capital-type solutions to help finance their supply chains and provide appropriate terms to their suppliers,” Bradley says.


Transformational export areas

2021 also marked the first year of a fully operational China and Transformational Exports Program (CTEP), a mandate for US Exim to help the country’s exporters compete against their counterparts in China and ensure that the US takes the lead in 10 ‘transformational export areas’. These are defined by the government as artificial intelligence, biotech, biomedical, wireless communications, quantum computing, renewable energy and storage, semiconductors, fintech, water treatment, and sanitation and high-performance computing.

It is US Exim’s goal to ring-fence 20% of its total financing authority – US$27bn out of a total US$35bn – for support of the CTEP.

The CTEP is “an initiative with tremendous potential and important national security implications”, writes US Exim president and chair Reta Jo Lewis in the agency’s 2021 Annual Report.

“Despite the pandemic, CTEP authorised more than US$140mn, and I fully expect this strong foundation to build in FY 2022 and beyond. Transformational export areas like semiconductors, 5G technology, renewable energy and energy and battery storage are at the heart of President Biden’s economic and national security strategies, and Exim will be working diligently to advance America’s comparative leadership in these sectors,” Lewis adds.

As outlined in a February 2022 briefing from the White House, companies have announced close to US$200bn in investments for semiconductor, EV and battery manufacturing in the US in the last year alone.

“US Exim has always been one of the leaders in traditional export credit agency transactions, including in the aviation space, and where we’re really seeing the agency – as led by the US government – evolve is in its support of clean energy and environmentally beneficial manufacturing and trade, which may encourage more diverse exports,” says Bradley. “It’s definitely a step in the right direction for the agency in terms of being creative about how it can adapt its programmes to different opportunities.”

This evolution aligns with Citi’s own strategy, as the bank works to support programmes rolled out by government departments. “These efforts are really helping banks like Citi lean into conversations about innovation, technology and clean energy, and this enables Citi to leverage the appetite of an export credit agency and use our credit capacity efficiently to help meet the needs of our clients.” says Bradley.

She highlights the EV market, and the integration of EV supply chains across North America, as a particular area of opportunity.

In November last year, President Biden signed the bipartisan Infrastructure Investment and Jobs Act, which includes significant funding for EVs and the infrastructure needed to support EV deployment.

According to market research firm Fortune Market Insights, the EV market in the US is projected to grow from US$28.24bn in 2021 to US$137.43bn in 2028.

“We’re seeing a lot of international collaboration, including with foreign export credit agencies, across the US and Canada, and a number of opportunities within EV supply chains in the region,” says Bradley.



Supporting a historic recovery

Measures to boost the US’ manufacturing prowess and industrial strength are already seen to be reaping rewards. As outlined in the February White House briefing, the US economy added 367,000 local manufacturing jobs in 2021 – the most in nearly 30 years – with manufacturing as a share of GDP returning to pre-pandemic levels.

“The progress made rebuilding American supply chains contributed to the fastest job growth in history, the fastest economic growth in nearly 40 years, and a faster recovery than every other country in the G7,” the briefing states.

Citi is strongly positioned to help its clients navigate these new opportunities. The bank has a well-established presence and comprehensive client focus in the US, along with deep experience working with US Exim and other export credit agencies and development finance institutions across the full range of transactions – from project and development finance through to working capital solutions.

“We’re really encouraged by the forward-leaning approach we’re seeing from US Exim and other agencies, which will go a long way in helping to drive the take-up of export finance solutions amongst companies and sectors that might be less familiar with the type of support available from ECAs,” says Bradley.