Revitalizing the Export-Import Bank for Great Power Competition

The charter of the Export-Import Bank of the United States is set to expire on December 31, 2026. As Congress prepares to draft reauthorization legislation, it has an opportunity to augment and reorient the Bank for a generation. Over time, a legacy design model, bureaucratic calcification, and outdated self-imposed restrictions have left EXIM inadequately prepared to defend U.S. industry in a rapidly changing era of global economic and strategic competition. This moment must not be a routine renewal. Congress should seize this opportunity to transform the Bank from a narrowly scoped jobs-through-exports tool into a dual-purpose instrument of American industrial strategy, one capable of laying the foundation of long-run supply chain security, safeguarding a reliable defense industrial base, driving the adoption of U.S. technology standards abroad, and leading American reindustrialization.

EXIM has long been a champion of American manufacturing, and its traditional mission deserves recognition. In fiscal year 2025, the Bank approved $8.7 billion in authorizations supporting an estimated $10.1 billion in U.S. export sales, with most transactions directly benefiting small business exporters.¹ This translates into tens of thousands of jobs annually. Often surprising to those unfamiliar with EXIM is its ability to manage this without losing money; the interest and risk fees EXIM collects provide revenue that offsets any operating losses. Over its ninety-two-year history, EXIM has supported manufacturing, agriculture, and technology exports to the order of hundreds of billions. These figures represent the livelihoods of working families in manufacturing communities across the country, families sustained by the kind of well-paying jobs that export industries disproportionately provide. Export-supported manufacturing positions pay up to 18 percent more on average than comparable non-export jobs, and manufacturing workers as a whole often earn a compensation premium over their private-sector peers.² EXIM’s traditional mission has helped preserve exactly these kinds of jobs that can buy a house, provide for a family, and anchor a community; that is a record worth defending.

Today, however, the United States needs something more, and Congress has an opportunity to redefine EXIM to meet that need. The Bank should retain and strengthen the jobs-promoting export finance role that has sustained many American manufacturing communities for generations. But it must also acquire a distinct and explicitly strategic mandate that allows it to more aggressively defend critical industries and contest adversarial alternatives wherever they threaten U.S. sovereignty, economic independence, or national security. Properly directed, EXIM can also serve as a force multiplier of U.S. commercial diplomacy, delivering financing that not only secures export contracts but also embeds U.S. products, technology, and standards in foreign markets. The reforms proposed below are the natural next chapter for an institution that has existed to ensure American industry can compete on a level playing field but adapted to a world in which the playing field has fundamentally changed.

The Stakes in a Changed World

The market assumptions that have governed American policy on official export finance and industrial policy (or lack thereof) since the end of the Cold War, and even those going back to EXIM’s establishment in 1934, were once valid. Today, they are not. The contemporary industrial competition is defined by novel challenges that provide the rationale for an augmented EXIM.

State-backed competition is the other hallmark of our era. Cue the elephant in the room that needs no introduction: China’s export credit agencies, development banks, state-owned enterprises, and industrial subsidies, which operate at a scale that no Western institution currently matches.³ Apart from sheer magnitude, state support is strategic. The intent goes beyond a pursuit of classical economic autarky, though self-sufficiency and supporting domestic employment are essential elements.⁴

In April 2020, Xi Jinping himself revealed China’s policy as seeking to cultivate foreign industrial dependency, telling the CCP’s Central Financial and Economic Affairs Commission that “China must tighten international production chains’ dependence on China [emphasis added], forming a powerful countermeasure and deterrent capability against foreigners who would artificially cut off supply.”⁵ China’s control over upstream rare earth supply chains has, as one analysis observes, already allowed Beijing to “successfully push back against US trade and tech pressures,” vindicating the strategy of ensuring that “the world is more dependent on China than China is on the world.”⁶ China’s fifteenth five-year plan, adopted in March 2026, places an even greater emphasis on supply chain resilience, risk prevention, and what Chinese planners describe as “security-critical capacity”: distributed infrastructure and redundant production networks designed to insulate China from precisely the kind of external leverage that Western policymakers have belatedly begun to pursue.⁷ The CCP’s ambitions do not stop at some internally acceptable level of self-sufficiency. They reflect an intent to pursue a level of dominance that places all other nations in a state of permanent industrial vassalage, with their access to critical inputs contingent on Beijing’s continued favor.

Contemporary perspectives must also account for the evolution of supply chains themselves. The dramatic growth in supply chain complexity over the past fifty years has long been studied and written about, but the natural consequence of that, namely fragility, has only recently begun to be appreciated. Critical nodes are often controlled by a handful of actors—sometimes a single firm—making them inherently vulnerable to disruption or capture. The technical knowhow and trade secrets that underpin these sectors are cultivated organically over years or decades, yet they can be lost in the moment of a single business failure, a hostile acquisition, or an ill-considered technology transfer. And high barriers to entry mean that when industrial capacity is lost, it does not simply reappear when market conditions change.

Trade and procurement decisions in sectors like information and communications technology, energy infrastructure, port logistics, and aerospace are not ordinary commercial transactions. They are investments into entire technological ecosystems where significant barriers to entry and exit mean that early supplier choices can lock in technological standards, maintenance chains, and market relationships for decades.⁸

“Winning a deal” in such sectors is rarely just about the immediate transaction. It can determine whether American companies are positioned to dominate a market or are excluded from it. The economist’s concept of path dependence operates with particular force in sectors characterized by network effects, high switching costs, and technical standardization. Once a country’s energy grid runs on Chinese-designed control systems, or its ports operate on Chinese logistics platforms, or its government communications travel through Chinese-manufactured switches, the cost of transitioning to American alternatives becomes prohibitive. The market has been “locked in,” and the geopolitical consequences follow inexorably from the initial procurement decision.

Consider, for example, information and communications technology (ICT). When a developing country selects a telecommunications vendor for its 5G backbone, it is not simply purchasing equipment but adopting a set of protocols, security architectures, training regimes, and vendor dependencies that will shape its digital infrastructure for the foreseeable future. Choosing a technology platform in an information-intensive sector creates lock-in at every level—individual, organizational, and societal—because switching costs encompass not only the financial expense of new hardware but the retraining of workforces, the redesign of network architecture, and the abandonment of institutional knowledge built up over years of operation. The upfront decisions effectively determine which foreign power’s technology, and by extension, which foreign power’s security standards and surveillance capabilities, will be embedded in that nation’s critical infrastructure.

Evidence of Chinese ICT exploitation is well documented. Reporting by the Financial Times and Reuters indicates that the Chinese-built African Union headquarters in Addis Ababa was at the center of repeated espionage concerns, including allegations of nightly data exfiltration to Shanghai and a later camera footage breach attributed to suspected Chinese hackers.⁹ Academic and technical analyses have linked some Chinese networking equipment to serious remote access vulnerabilities and insecure default mechanisms that can function, in practice, as persistent access points for malicious actors.¹⁰ These entail only some of the myriad risks of allowing adversarial technology to become the default infrastructure standard.

Many prospective buyers are aware of said risks but face their own limiting constraints. Price and speed are often the foremost among them. For these reasons, a U.S. firm’s state-of-the-art technology may only be a secondary consideration in procurement decisions. In the contest for global infrastructure, the offer with state-backed capital and faster execution has repeatedly trumped better engineering. This is the arena in which a reformed EXIM must be prepared to fight.

A Dual-Track Bank

EXIM has historically been, first and foremost, a jobs-through-exports institution, and that mission has served American workers and communities well. The Bank’s conservative underwriting standards, its rigid default rate caps, and its focus on transactions with a direct nexus to American employment were all designed for sound reasons: to prevent financial losses to taxpayers, to avoid distortive subsidies, and to ensure that government-backed financing complements rather than displaces the private sector. These guardrails have produced a genuinely impressive track record of fiscal discipline, but they have also produced an institution that, by design, is optimized for a narrow task: supporting jobs and some base manufacturing capacity through conventional export finance. Unfortunately, that is not an EXIM ready to defend American industry today.

The United States requires a strategic financial tool that can operate, when necessary, with the gloves off: in a way that can defend and rebuild strategic industries, secure vulnerable supply chains, embed American technology in contested markets, and do so with the speed, flexibility, and risk tolerance that great power competition demands. EXIM’s current mandate, however proficient within its lane, does not contemplate large-scale industrial strategy. Its risk framework does not accommodate the higher-stakes transactions that strategic competition requires; its operating constraints were designed for an era of commercial competition among like-minded allies, not for a contest against a state-directed economic system that views export finance as a means to geopolitical dominance. Addressing this deficiency demands going beyond the usual charter reauthorization tinkering to a fundamental rethink of what EXIM should be.

Since the Export-Import Bank Act of 1945, the Bank’s identity has been organized around a single proposition: that the federal government’s role in export finance is to fill marginal gaps in supporting American employment that the private market cannot. That proposition remains valid but is no longer sufficient as the sole organizing principle of a ninety-year-old institution operating in a world where finance, industrial strategy, and national security have become inextricably bound. Congress should establish a new, formally differentiated two-track authority within EXIM’s charter, preserving the proven commercial mission while creating, alongside it, a distinct strategic mandate with its own authorities, risk tolerances, and operational logic. This would represent a full reconception of the Bank’s role in American economic statecraft.

The first track, a General Commercial Authority, would preserve the Bank’s existing mandate in essentially its current form. All financing under this authority would remain directly tied to jobs created or maintained in the United States, largely subject to existing fiscal scrutiny. This is the proven, fiscally responsible core of what EXIM does well, and it should not be diluted.

The second track, a new Strategic Authority, would be designed expressly for the realities of great power competition. This authority would support critical strategic industries vital to national security, supply chain resilience, and domestic production capacity but would not be bound by the same strict constraints as the General Commercial Authority. It would finance reindustrialization priorities even where the direct job connection is less immediate, but where strategic capacity yields long-term national benefits. This includes geostrategic infrastructure: ports and energy projects in Latin America, mining and refining in West Africa, telecommunications networks across the developing world, and logistics platforms that might otherwise default to foreign standards and are at risk of adversarial control.

The Strategic Authority would differ from the General Commercial Authority in several crucial respects. It would operate with a higher risk tolerance, reflected in a separate and more permissive default rate cap, perhaps 5 to 9 percent that would be reviewed every one to two years, compared with a more flexible 3 to 5 percent ceiling appropriate for the commercial portfolio. It would possess the flexibility to operate outside conventional export credit constraints, including the OECD Arrangement, for strategic and import activities where those constraints would otherwise prevent the United States from competing effectively; it would not face the same content thresholds that mechanically tie maximum lending support to direct export value; and it would carry a broader mandate to advance U.S. national security in critical theaters. For example, Strategic Authority could be invoked to support transitions that displace competitors’ ICT systems, ports designed for adversarial dual-use, or deals in which buyers risk ceding energy grid control.

The Strategic Authority should be authorized for seven to ten years, with a mandatory congressional review at expiration. This shorter horizon, relative to a ten-to-fifteen-year reauthorization appropriate for the General Commercial Authority, reflects the timely and adaptive nature of industrial strategy. It allows Congress to periodically recalibrate priorities, risk tolerances, and eligible sectors in light of evolving geopolitical conditions, while maintaining discipline over what will necessarily be a riskier portfolio. The dual-horizon approach balances predictability for the Bank’s core commercial role with accountability for its newer strategic functions.

Beyond Exports: The Case for Import Finance

One of the less intuitive reforms Congress should consider is codifying a robust, operationally distinct import authority within EXIM’s charter as part of a broader Strategic Authority. The statutory foundation for this is not entirely absent: the Bank’s foundational purpose clause states that EXIM’s objectives include aiding in financing “exports of goods and services, imports, and the exchange of commodities and services” between the United States and foreign countries.¹¹ Yet, save a few minor cases, the import language has remained essentially dormant for most of the Bank’s history. EXIM’s operational mandate and institutional culture are all oriented around exports and U.S. job creation. While present statutorily, EXIM has never developed this authority at a programmatic level, which is understandable when viewed through a pure job-through-exports lens. But in the strategic context of defending industrial supply chains, import operations gain a deeply important role.

The viability of domestically manufactured goods often depends on stable access to upstream inputs, critical minerals, rare earth elements, and specialty chemicals whose markets are sensitive to manipulation. An export credit agency that finances the sale of finished goods abroad but ignores the vulnerability of the supply chains that feed those goods at home may be set up for failure.

Let us imagine that a U.S. samarium refinery is expanding capacity with financing from the Department of War’s Office of Strategic Capital (OSC). The facility is strategically important: samarium cobalt magnets are essential components in precision-guided munitions, satellite systems, and high-performance motors. But the refinery’s viability depends on a stable supply of raw samarium ore, most of which is mined in China or in countries where Chinese firms dominate extraction. If Beijing decides to artificially inflate ore prices, or deliberately constrain supply, while simultaneously directing state-owned enterprises to dump refined samarium products at below-market prices, the American refinery faces a brutal squeeze. Its input costs rise while its output prices are undercut. Downstream financing alone cannot compensate for an upstream market manipulation.

This is not a hypothetical risk. From 2010 to 2012, China imposed strict export quotas and licensing restrictions on upstream rare earth elements, reducing export volumes by as much as 35 percent while continuing to supply downstream rare-earth magnets and components to global markets. A 2014 World Trade Organization ruling confirmed that these measures violated China’s trade commitments, finding that they artificially restricted upstream supply while favoring domestic processors.¹² While the ruling was a legal victory, it changed nothing: the WTO has no enforcement mechanism capable of preventing a recurrence, and the structural dependence of global supply chains on Chinese rare earths remains essentially unaltered. A more recent modeling study indicated that China’s phosphorus supply chain is heavily concentrated at the upstream phosphate-rock stage.¹³ This gives Beijing substantial leverage over a key input while helping sustain its downstream strength in fertilizer markets. On the downstream side, empirical and market studies indicate that China is able to distort downstream fertilizer markets through export controls, tightening global supply and influencing prices while prioritizing domestic availability.¹⁴

Congress should formalize a mandate under the proposed Strategic Authority for EXIM to engage in import finance to support strategic U.S. industries and ensure access to critical inputs as a matter of national security. This import mandate should be entirely separate from the jobs-based criteria governing the General Commercial Authority. Its purpose is not to support employment through trade in the traditional sense but to secure the upstream supply chains without which domestic manufacturing cannot survive. Within this mandate, EXIM would be able to lean on its banking expertise to develop new products, such as swap insurance to offset cost spikes beyond a set price band and forward purchase financing to secure long-term supply at predictable costs. Such instruments would complement, not duplicate, other U.S. programs, such as the Department of War’s OSC. Where OSC finances the construction of domestic strategic capacity, EXIM’s import authority would ensure that the raw material lifelines upon which that capacity depends cannot be severed or manipulated into irrelevance by adversarial market practices. The two institutions would function as interlocking pieces of a coherent industrial strategy: one building the factory, the other securing the supply line.

Any discussion of import finance must, however, confront an obvious tension: subsidized or government-backed imports can, if poorly targeted, have the potential to undermine the very domestic industries that the broader reform agenda seeks to rebuild. If EXIM were to finance the importation of refined materials at sub-market prices (even if to correct manipulation by third-party actors) to support downstream manufacturers, the effect could suppress domestic firms before they have a chance to reach viability. The import mandate should therefore include explicit safeguards: periodic interagency review of import-financed sectors to assess whether viable domestic alternatives are emerging, sunset provisions for import support in sectors where domestic capacity reaches commercially sustainable scale, and coordination with the Department of Commerce and the Office of the U.S. Trade Representative to examine strategic trade-offs. In short, the mandate should ensure that import finance does not inadvertently replicate the market-distorting dynamics it is designed to counter.

Simultaneously, the reality of global mineral geography means that for many upstream inputs, domestic production is not merely underdeveloped, it is geologically impossible. The United States simply does not possess commercially viable deposits of every mineral required by its advanced manufacturing base. Cobalt, for instance, is overwhelmingly concentrated in the Democratic Republic of Congo. Natural graphite deposits sufficient for battery-grade production are sparse in North America. Several rare earth elements essential for defense applications are found in economically extractable quantities in only a handful of countries worldwide. Import finance in such cases is a tool for managing foreign dependency, ensuring that the United States can secure long-term supply contracts, diversify sourcing away from adversary-controlled channels, and stabilize prices against the kind of deliberate market manipulation that China has repeatedly demonstrated. The import authority should therefore distinguish between inputs where domestic capacity is viable and should be promoted and inputs where geological or economic realities make sustained importation unavoidable, applying different oversight frameworks to each.

EXIM’s Supply Chain Resiliency Initiative, launched in 2025, already gestures in this direction, albeit indirectly. SCRI finances overseas mining projects through long-term offtake contracts with U.S. manufacturers, particularly in critical minerals and rare earths, to reduce dependence on adversarial supply chains. Congress should formally elevate supply chain resiliency as a mandate within Strategic Authority and further enable EXIM to expand its tool chest with direct import financing programs to secure strategic inputs.

The most dramatic vindication of the import finance thesis arrived in February 2026, when EXIM approved what may prove to be the most consequential transaction in its ninety-two-year history. Project Vault, a public-private partnership establishing the U.S. Strategic Critical Minerals Reserve, received a direct loan of up to ten billion dollars from EXIM.¹⁵ The initiative will procure and physically stockpile all sixty minerals on the U.S. Geological Survey’s 2025 Critical Minerals List across the United States. Participating manufacturers commit capital and pay commitment fees in exchange for guaranteed access to specified materials during supply disruptions. Effectively, this is an insurance-style mechanism designed to insulate American industry from precisely the kind of upstream price manipulation and supply throttling that this article has described.

The initiative also illuminates the trajectory—and constraints—of EXIM itself. Project Vault was approved under existing authorities but was enabled by financial engineering to essentially accomplish import-reliant price and supply stability. This innovation solves a problem for which no tailor-made tool existed. As EXIM Chairman John Jovanovic acknowledged at Project Vault’s launch, “the challenge was enormous, not simply because it had never been done before.”¹⁶ Mechanically, the structure is indirect, not classic import finance or insurance. This demonstrates a gap in EXIM’s charter limiting its ability to address present industry needs and further underscores precisely why Congress must act boldly during the reauthorization. Project Vault is a great start, but further rollout of more advanced financial instruments and structures would enable EXIM to deliver even greater impacts.

Consider an alternative framework in which EXIM could directly deploy financial derivatives such as commodity swap options or price band insurance, allowing manufacturers to directly purchase a hedge against upside price volatility. Such tools would not replace the strategic value of a physical minerals stockpile but could offer a more flexible and potentially lower-cost complement. The opening chapter of a formal import finance authority should give EXIM the legal clarity and mandate to undertake such initiatives as a matter of routine institutional practice rather than as an ad hoc initiative. The Strategic Authority proposed above would give these tools an institutionalized statutory framework for both expanded operational scope and oversight discipline.

Restoring Defense Export Financing

EXIM’s charter currently contains a general prohibition on the Bank’s financing of defense articles and defense services.¹⁷ In determining what constitutes a “defense article,” the Bank applies criteria based on the nature of the export, the intended end use, and the identity of the buyer and end user. Items sold to a military organization or designed primarily for military use are presumed to be defense articles unless proven otherwise.¹⁸ The charter provides two narrow statutory exceptions for nonlethal, civilian “dual-use” items and certain counternarcotics uses, as well as a handful of administrative exclusions around humanitarian uses. In practice, however, these narrow carve-outs have confined EXIM’s involvement to a vanishingly small set of cases, leaving the Bank largely sidelined from strategically significant defense-adjacent markets and, by extension, from supporting the upstream industries that feed America’s defense industrial base. The Government Accountability Office has also conducted repeated reviews of the dual-use export monitoring framework, finding the portfolio so small that by fiscal year 2025, there were no active dual-use transactions requiring monitoring: a telling indication of how thoroughly the restriction has constrained EXIM’s engagement in this space.¹⁹

These strict defense export financing restrictions did not always exist. The prohibition has its roots in the political climate of the mid-1970s when Congress amended EXIM’s charter to reflect a broader effort to reassert control over the instruments of American foreign policy and to prevent government-backed export finance from being drawn into controversial arms transfers to developing countries.

Whatever the merits of the original prohibition in its historical context, the economics and security stakes have changed. Many of America’s most important industrial outputs—aerospace, space systems, advanced electronics, secure ICT—are inherently dual-use and a substantial portion are purchased as such. The line between a civilian satellite constellation and a military communications platform, between a coast guard patrol vessel and a naval combatant, between a commercial data center and national intelligence architecture, is often a matter of software configuration rather than fundamental design. The Department of War itself has recognized this reality, increasingly sourcing critical technologies from commercial supply chains rather than bespoke defense contractors. EXIM’s charter drives a wedge between civilian and military applications that leaves American industry woefully disadvantaged.

U.S. allies and adversaries alike employ their export credit agencies to finance not only dual-use goods but overtly military-related exports and infrastructure, regardless of the end user. China’s Eximbank, China Development Bank, and Sinosure routinely finance defense-adjacent infrastructure: ports with dual civilian-military utility, communications networks designed for intelligence collection, and surveillance systems marketed as “public safety” tools to name a few. This places American firms at a serious disadvantage in sectors where state-backed competitors freely bundle financing with strategic sales. When a Southeast Asian navy is evaluating patrol vessels, and the Chinese offer comes with a full financing package while the American offer requires the buyer to arrange its own commercial credit, the outcome is foreordained.

Congress should reform EXIM’s charter to establish a framework under the Strategic Authority that recognizes this reality. EXIM should be permitted to finance exports with clear strategic or industrial value to the United States, even where military applications are substantial. Congress should also consider allowing the Bank to finance direct military exports outright where there is a clear nexus to U.S. jobs, defense industrial base sustainment, or strategic national interests. EXIM could, for instance, finance allied purchases of U.S.-built patrol aircraft, secure communications equipment, or emergent technologies such as autonomous surface vessels. Doing so would unlock an entirely new segment of buyers whose purchases would support both strategic industries and manufacturing jobs. The question of loosening this prohibition is not new. In its June 2024 report on EXIM in the context of great power competition, the Center for Strategic and International Studies recommended that Congress consider removing the restriction, noting that the U.S. defense industry supports approximately two million American jobs and that many countries are actively seeking alternatives to Russian or Chinese weapons systems.²⁰ Moreover, from a purely strategic context, allowing EXIM to support defense-related exports would embed U.S. technology and broader U.S. industrial linkages via network effects within allied and global security architecture.

To ensure accountability and alignment with U.S. policy, such transactions should require State Department and Department of War review and concurrence, with either agency potentially holding veto authority. They should be subject to quarterly reporting to Congress for transparency, and they should remain consistent with international arms transfer commitments and export control laws. Properly structured, this expansion would not displace existing defense financing programs like Foreign Military Financing but would add an export credit tool to strengthen U.S. competitiveness and domestic industry within defense supply chains. Far from crowding out support for nondefense exports, as some critics have historically charged, this reform would reinforce U.S. alliances, sustain key segments of the defense-industrial base, and deny adversaries the ability to dominate strategically sensitive markets or technology ecosystems through financial leverage alone.

Prevent Unilateral Disarmament

EXIM’s charter already contains a nondiscrimination provision. Section 2(k), added by Congress in 2015, prohibits the Bank from denying an application for financing “based solely on the industry, sector, or business” that the application concerns, with explicit application to energy projects “regardless of the energy source involved.”²¹ The intent was sound: to ensure that EXIM evaluates transactions on their commercial merits rather than applying blanket sectoral exclusions. But the provision’s effectiveness has been tested by shifting political priorities, and its protective force has proven less durable than Congress likely intended.

The core issue is that American industry and the prospect of ensuring energy security for the United States and its partners, particularly in sectors facing subsidized foreign competition, requires consistency. When EXIM’s willingness to finance energy exports fluctuates with the political cycle, critical industries are exposed to capture by foreign competitors who face no such uncertainty.

Oil and gas remain essential to American economic security for the foreseeable future; the International Energy Agency’s own projections show continued global demand for hydrocarbons well into midcentury. But the charter’s current “solely” qualifier creates interpretive ambiguity that has allowed successive administrations to encourage or discourage entire categories of energy financing through executive directives, advisory council guidance, and multilateral negotiations (such as the OECD) without ever formally amending the charter.²² The result is an institution whose energy portfolio is subject to political variability in ways that undermine the long-term predictability that foreign buyers and American exporters require. Every year that EXIM’s support for a given energy sector is uncertain is a year in which Chinese and Russian state-backed financiers move to fill the void. They embed their technology, their standards, and their political influence in infrastructure that will operate for decades.

To be clear, the argument for strengthening non-discrimination is not merely to sustain EXIM’s support for nuclear, oil, and gas industries specifically, against a backdrop of environmental concerns, though that is the effect. It is rooted in a recognition that energy security is a higher-order precondition for national security, and that the standards-setting effects of American energy technology exports, across all energy types, are among the most consequential instruments of U.S. commercial diplomacy.

When a developing country builds an LNG terminal, an ethane cracker, or a renewable energy installation with American technology, it is adopting American engineering standards, training its workforce on American systems, and integrating its energy infrastructure into an American-anchored technological ecosystem. The United States benefits for generations from the long-term commercial relationships and security advantages that follow. Conversely, when that same country turns to Chinese or Russian alternatives because American financing was unavailable or uncertain, all of these benefits are lost, often permanently. Concern over carbon emissions, legitimate or not, rings completely hollow when the question is not if but who finances a project. An all-of-the-above approach to energy exports—supporting oil and gas technology alongside renewables, nuclear, hydroelectric, and emerging energy systems, without discrimination—is the only posture consistent with the competitive realities facing the United States.

The case for defending U.S. energy technology is underscored by one of the more bitter ironies of recent industrial history. Solar photovoltaic technology was an American invention. The silicon PV cell was created at Bell Labs in 1954, and the United States led the world in solar research, development, and manufacturing through the 1970s and ’80s. PV cells have long since developed from a “green/alternative” energy to a core and growing aspect of the primary energy blend. Yet through a combination of Washington’s complacency in the face of Chinese industrial ambition and the failure to deploy adequate defensive support tools, the U.S. solar industry was effectively conquered. China poured over $50 billion in subsidies into its PV supply chain after 2011, and Chinese-owned companies expanded their share of global solar cell production from less than 2 percent in 2004 to over 80 percent by 2024.²³ The subsidy-powered surge decimated innovative firms elsewhere. Chinese state-backed export finance helped finish the job. Prices fell, market-based American R&D could not compete, patenting across the industry collapsed, and various technological pathways that might have produced even lower costs and better performance were abandoned. The state-techno-industrial-finance model won, free trade lost, and so did American solar (among many other things). The lesson is that America’s energy industry and technology must be defended; failure to do so, including for reasons of idealism or wishful thinking, is ruinous.

Congress should strengthen the existing nondiscrimination framework during the reauthorization to insulate EXIM’s energy portfolio from political ebbs and flows. Specifically, the charter should be amended to prohibit EXIM from entering into any international agreement, binding or otherwise, that would have the effect of excluding or discriminating against entire U.S. energy sectors from receiving financing on competitive terms. It should also clarify that the Bank’s environmental review authorities do not constitute a basis for blanket sectoral exclusions, and that non-discrimination applies to the practical effect of administrative actions, not merely their stated justification. The goal is not to override legitimate project-level environmental review, which should continue as a matter of sound underwriting practice, but to ensure that EXIM can effectively use its support to defend American energy and technological advantages.

The Arithmetic and Scale of Risk

EXIM’s charter currently requires the Bank to maintain a default rate below 2 percent of its total portfolio. If the rate exceeds that threshold, the Bank is prohibited from authorizing new loans, guarantees, or insurance until it falls back below the ceiling. This strict cap was designed to ensure fiscal discipline and protect taxpayers—and by that narrow measure, it has succeeded handsomely. EXIM’s historical default rate has remained well below the statutory ceiling, often under 1 percent. At the end of fiscal year 2025, it stood at 1.023 percent.²⁴

But fiscal discipline and strategic effectiveness are not the same thing, and a framework designed for the former can actively undermine the latter. In sectors defined by great power competition, the environment will sometimes require EXIM to support transactions that carry higher commercial risk but deliver outsized strategic value: a submarine cable project in a contested maritime region, a refinery in a country with imperfect governance, a telecommunications upgrade for an ally whose creditworthiness is middling but whose strategic importance is paramount. A rigid, one-size-fits-all default cap makes no allowance for this reality.

Congress should establish a differentiated default framework corresponding with the Bank’s two authorities. For the General Commercial Authority, the current 2 percent cap should be raised to a range of 3 to 5 percent. This is not a call to abandon risk discipline and is consistent with other recent proposals to reform EXIM’s statutory risk tolerance. Prudent underwriting and fiscal stewardship remain essential in a general export credit context, and EXIM’s track record of maintaining defaults well below the statutory ceiling reflects genuine institutional competence. But the current threshold borders on overkill and has the effect of operational limitation. The Bank is increasingly expected to support transactions in frontier markets and emerging sectors where competition is fierce, including against other OECD-backed exporters. A modestly higher ceiling, paired with continued congressional oversight and regular reporting, would give the Bank the breathing room to compete more effectively without generating excessive risk for the U.S. taxpayer. For the Strategic Authority, a substantially higher ceiling of 5 to 9 percent, subject to review and regular reporting to Congress, would acknowledge the inherently greater risk but necessary flexibility in the realm of strategically targeted financing.

Beyond differentiation, the current framework also suffers from a structural flaw: it is static and fails to account for changes in portfolio size. When the Bank’s total exposure is relatively small, as it has been in recent years, even a handful of claims can produce an artificially high default rate, because the denominator is so low. Conversely, the same number of defaults against a larger portfolio would barely register. This means the current framework ties a fixed percentage to a fluctuating base, producing results that are more of an arithmetic artifact than a meaningful risk metric. Congress should consider either a dynamic cap that automatically adjusts thresholds based on portfolio size, or an alternative benchmarking approach that measures defaults against EXIM’s maximum statutory lending authority rather than current exposure. Either reform would eliminate the arbitrary impact of portfolio size and better reflect the Bank’s actual risk-bearing capacity without sacrificing the underlying commitment to fiscal stewardship.

Equally relevant is EXIM’s statutory exposure cap, which currently stands at $135 billion. While this ceiling has not been reached in recent years due to market and operational constraints, it has been approached in the past, and it is plainly inadequate for the scale of competition the United States now faces. The comparison with the U.S. International Development Finance Corporation (DFC) is instructive, not as a criticism of DFC, which has become an increasingly central instrument of U.S. economic statecraft, but as an illustration of the scale at which Congress is now willing to resource institutions it considers strategically important. DFC’s original statutory cap under the 2018 build Act was $60 billion, less than half of EXIM’s current ceiling. Yet in December 2025, Congress raised DFC’s maximum contingent liability to $205 billion through the DFC Modernization and Reauthorization Act of 2025, a more than threefold increase that now places DFC’s authorized capacity well above EXIM’s. Congress correctly recognizes the need to resource DFC at that scale for the task of mobilizing private capital. Congress should also equip EXIM, the nation’s official export credit agency and the institution most directly responsible for ensuring American firms can compete against state-backed foreign rivals, with at least proportional firepower.

Thus, Congress should raise the Bank’s lending cap to at least $300 billion, giving EXIM a potent war chest. Though it is unlikely to be fully utilized anytime soon, it will be at hand when circumstances demand it. A higher EXIM ceiling would also signal to exporters, borrowers, and competitors alike that the United States is willing and able to compete at scale.

The Cost of Uncertainty

In export finance, stability and predictability are prerequisites rather than luxuries. Foreign buyers making multi-decade infrastructure commitments require confidence that the institution backstopping their financing will still exist in five years for the next phase of a planned project. Lenders syndicating EXIM-guaranteed debt need assurance that the Bank will be a reliable partner for follow-on deals. Exporters planning capacity expansions must know that the market access tools they are counting on will not evaporate.

Repeated short-term renewals of EXIM’s charter have undermined all of these demands. The most damaging episode came in 2015, when Congress allowed the Bank’s authorization to lapse entirely for five months. During that period, EXIM could not approve new transactions and could not even engage with foreign buyers and exporters considering a deal. The signal sent to all parties was that the United States is an unreliable partner. In real terms, foreign export credit agencies moved aggressively to fill the vacuum and took supply contracts that should have gone to American exporters. Some of the market share lost during that period has never been recovered.

Congress should reauthorize the General Commercial Authority for at least ten to fifteen years and the Strategic Authority for seven to ten years. The differential reflects the distinct characters of the two mandates. The commercial mission is well established and relatively stable; it benefits from maximum predictability. The strategic mission is newer and more adaptive; it requires periodic recalibration but should still offer enough runway for the kind of long-horizon projects—submarine cables, hydro dams and nuclear plants, country-scale ICT networks—that define strategic competition.

Further, a strategically oriented EXIM should operate with intentional coordination. Its charter should explicitly establish coordination with the OSC, whose mission focuses on early to mid-stage capital for dual-use technologies. The two institutions are naturally complementary: OSC invests in building strategic capacity at home while EXIM’s Strategic Authority would finance the export of that capacity abroad and the import of critical inputs that sustain it.

Similarly, EXIM should be positioned as a complement to the Development Finance Corporation, which has just received its own expansion. DFC’s mandate is broader: it encompasses lending, equity investments, and political risk insurance across a wide range of sectors. EXIM’s comparative advantage lies in its deep expertise in industry-specific export finance. Operating in unison from deal origination to designing financing packages, the two institutions have the potential to magnify each other’s impacts.

The Moment of Decision

The reauthorization of EXIM’s charter is one of those rare legislative moments to which most people will be oblivious, but it will matter enormously. The Bank’s defenders have traditionally pitched it as a modest, fiscally responsible jobs program, and they were not wrong. But modesty is no longer a virtue when the competition is playing for keeps. Foreign export credit agencies, development banks, and industrial support funds have become instruments of a grand strategy to reshape the global economic and security order at the expense of the United States, and they are backed by the requisite resources to meaningfully do so.

Properly reformed, EXIM can serve as a force multiplier for American commercial diplomacy, industry, manufacturing jobs, and national security. A dual-track authority structure would preserve fiscal discipline for the Bank’s commercial mission while granting flexibility where the strategic stakes are higher. Import finance capabilities would neutralize adversarial attempts to manipulate supply chains to capture industries. Expanded dual-use and defense support would align EXIM with the reality that modern industrial competition does not fit within artificial boundaries between civilian and military applications. Non-discrimination protections would prevent unilateral concessions. Differentiated default caps and a higher lending ceiling would give the Bank the risk tolerance and the scale to consistently win competitive deals. Lastly, a longer reauthorization horizon would rebuild confidence among stakeholders that EXIM is reliable and here to stay.

With the old debates over EXIM’s existence largely settled for the time being, there is little doubt that Congress will reauthorize EXIM’s charter in some form. But how exactly that looks will determine whether EXIM emerges as a serious instrument of American power or remains an institution designed for a world that no longer exists.

This article originally appeared in American Affairs Volume X, Number 2 (Summer 2026): 169–87.

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Notes