The US export credit agency says a newly launched financing mechanism for critical mineral imports will tackle “market manipulation” by China by bolstering domestic firms’ supply chains. 

The Supply Chain Resiliency Initiative was unveiled by the Export-Import Bank of the United States (US Exim) on January 8 as a “bold new financing tool” available to domestic manufacturers such as battery and semiconductor producers by facilitating access to raw materials. 

US Exim has since explained that under the scheme, it will provide financing for imports from international mines, provided the US importer has already signed an offtake agreement with the overseas supplier and the project is not owned or controlled by Chinese entities.

Projects are also ruled out if they have a “significant” number of Chinese customers. 

Typically, the agency’s financing has been tied to US exports of goods and services, it says in a notice on its website. 

“Here, Exim’s financing is tied to our import authority and the financed amount depends on the amount of the off-take contract between the foreign project and the US importer,” it says. 

The initiative follows concerns that the US relies heavily on China for mining, processing and refining critical minerals, leaving its industrial sectors exposed to market manipulation, export controls and the risk of job losses, the agency says. 

The scheme was introduced at a meeting last week between US Exim and its advisory China Competition Committee. Following the session, the agency said the initiative “shifts supply chain dominance away from China and addresses market constraints faced by US companies”. 

Reta Jo Lewis, whose three-year stint as US Exim president and chair drew to a close two weeks ago, said on January 14 the initiative addresses “what we would call a critical financing gap”. 

During an interview with the Center for Strategic and International Studies, Lewis said China’s control of the market for critical minerals “puts a chill on our American companies who are wanting to compete”. 

“We know that critical minerals is the industry that is not only fuelling our US innovation and our growth, but also it’s an industry where now a ban has been put on so many of our critical mineral products,” she said. 

She cited China’s export controls on gallium, germanium, antimony and graphite – minerals critical to semiconductor manufacturing – as an example. 

China, which supplies 98% of the world’s gallium and 60% of germanium, initially introduced restrictions in July 2023, prompting price spikes for both materials, and in December explicitly prohibited all exports to the US. 

“We need to make sure that could use whatever financing tools that we have to help level the playing field,” Lewis said. 

Denver-headquartered law firm Brownstein Hyatt Farber Schreck says in a client alert that the Supply Chain Resiliency Initiative “marks a significant advancement” in efforts to rebuild secure supply chains for critical minerals. 

It provides “a significant opportunity for US firms seeking to expand their international operations in key regions globally, including the Middle East, Africa, Central Asia, and Central and South America”, Brownstein says. 

“We expect the Trump administration will further emphasise the importance of processing critical minerals and rare earths domestically.” 

US Exim adds the scheme also dovetails with its Make More in America Initiative, approved in 2022, which provides financing for domestic manufacturing facilities. 

Production of semiconductors and other “transformational” manufacturing requires a 15% export nexus to qualify for financing. 

The move comes as US Exim’s leadership team under the Trump administration continues to take shape.  

The agency announced last week that former congressman and US Exim director Spencer Bachus will serve as interim president and chair of the board of directors, following last month’s launch of a “beachhead team” sworn in immediately after Trump’s inauguration on January 20.