S.753 - Strengthening Exports Against China Act (119th Congress)
Summary
S.753, the Strengthening Exports Against China Act, aims to amend the Export-Import Bank Act of 1945. The amendment seeks to exclude certain financing from the calculation of the default rate when determining the lending cap for the Export-Import Bank. This exclusion applies to financing that facilitates the replacement of or competition with products or services provided by entities on the Entity List maintained by the Bureau of Industry and Security or specially designated nationals and blocked persons maintained by the Office of Foreign Assets Control.
Expected Effects
The bill's passage would likely lead to an increase in the Export-Import Bank's capacity to finance projects that compete with Chinese entities. This could shift the focus of the bank's lending portfolio. It could also incentivize domestic companies to develop alternatives to products and services currently dominated by Chinese firms or entities.
Potential Benefits
- Increased Competitiveness: US companies may become more competitive against Chinese entities.
- Reduced Reliance on Adversaries: The US could reduce its dependence on goods and services from entities considered a national security risk.
- Job Creation: New jobs may be created in the US as domestic industries expand to compete with Chinese firms.
- Economic Growth: The US economy could experience growth as a result of increased exports and domestic production.
- Support for Transformational Exports: The bill supports the Program on China and Transformational Exports, potentially fostering innovation.
Potential Disadvantages
- Potential for Increased Risk: Excluding certain financing from default rate calculations could increase the bank's overall risk exposure.
- Retaliatory Measures: China could retaliate with similar measures, harming US exports to China.
- Unintended Consequences: The definition of entities subject to exclusion may be too broad or too narrow, leading to unintended consequences.
- Administrative Burden: The Bank may face an increased administrative burden in determining which financing qualifies for exclusion.
- Potential for Market Distortion: Government intervention in financing could distort market signals and lead to inefficient allocation of resources.
Constitutional Alignment
The bill appears to align with the Constitution's broad goals of promoting the general welfare and providing for the common defense (Preamble). Article I, Section 8 grants Congress the power to regulate commerce with foreign nations. The bill's focus on exports and competition with foreign entities falls under this power. However, the specific mechanisms and potential economic impacts would need further scrutiny to ensure they do not infringe on other constitutional principles.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).