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The Export-Import Bank of the United States (US Exim) has formally launched a new domestic financing programme to boost American manufacturing and grow the country’s participation in global supply chains.

US Exim’s new ‘Make More in America’ initiative will see the agency’s range of medium and long-term loans made available for the establishment or expansion of US-based manufacturing facilities with a so-called “export nexus”.

Historically, US Exim has provided support when an export contract with an overseas buyer is already in place.

Through this untied approach, domestic project developers will be able to tap US Exim financing and cover if at least a quarter of the output is destined for foreign markets.

Small businesses and those in high priority sectors – such as renewable energy technology, energy storage, biotech and semiconductors – will face a less stringent export nexus requirement of only 15%.

“The Covid-19 pandemic and recent global events have exposed long-standing holes in America’s supply chains, including insufficient manufacturing capacity, the erosion of the United States’ export industrial base, and competition with China and other countries,” US Exim says.

“Solving these challenges, fostering economic resilience, and revitalising America’s manufacturing and export capacity requires the United States to use all the tools in our toolkit – including the Export-Import Bank.”

Since taking office in early 2021, the Joe Biden administration has been working to tackle supply chain vulnerabilities for goods deemed to be critical for national and economic security purposes.

A shortage of semiconductors in the months following the outbreak of the pandemic roiled various industries, not least major automotive manufacturers such as Ford and General Motors, who were forced to limit production at factories – or shutter them entirely.

In February last year, President Biden ordered a 100-day review of supply chains for four key products, including semiconductors, large capacity batteries, pharmaceutical goods and critical minerals.

The final report packed a raft of recommendations, including for US Exim to look into developing a domestic finance programme targeted at American manufacturers and export-focused infrastructure projects.

As well as addressing supply chain weaknesses, the export finance industry expects the new initiative will help US Exim compete with other ECAs who have set up similar programmes in recent years, such as UK Export Finance (UKEF).

The UK government agency has rolled out billions of pounds’ worth of support to large corporates such as Ford and Jaguar Land Rover through its equivalent programme.

“We view US Exim’s domestic financing programme as a welcome addition to its capabilities,” Lynee Bradley, North America head, export and agency financing, Citi treasury and trade solutions, told GTR earlier this year.

“It is consistent with those offered by other OECD ECAs such as UKEF’s export development guarantee programme, and will greatly expand the type of industries and opportunities that US Exim can support.”

In a bid to improve transparency and congressional reporting measures, US Exim says its board made certain amendments to the programme prior to approval last week.

The ECA is typically required to give the US Congress advance notice of any transaction over US$100mn. For any deals related to the new Make More in America initiative, this bar has been lowered to US$50mn.

US Exim’s support under the programme is limited at 80% of a project’s total financing requirements, lower than the 85% stipulated under the OECD Arrangement.

The level of finance on offer through the new initiative will also be tied to the number of jobs a particular project supports, with US Exim offering up to US$190,000 for every year an American worker is employed.

When contacted by GTR, a US Exim spokesperson declined to say whether any companies had yet applied for support through the programme, citing business confidentiality reasons.