Sensitive Commercial Sectors and Products List

Overview

Section 2(e)(5) of the Export Import Bank Act of 1945, as amended, requires the Bank to submit, on an annual basis, a list to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives, which designates sensitive commercial sectors and products with respect to which the provision of financing support by the Bank is deemed unlikely by the President of the Bank due to the significant potential for a determination that such financing support would result in an adverse economic impact on the United States. Pursuant to that requirement, the Bank submitted its Sensitive Commercial Sectors and Products List to Congress on December 17th, 2023.

SENSITIVE COMMERCIAL SECTORS AND PRODUCTS LIST DECEMBER 2023

This Sensitive Commercial Sectors and Products List (”the List”) is issued in compliance with Section 2e(5) of the Export-Import Bank Act of 1945, as amended.

Sectors

Steel: Additions to global raw steelmaking capacity.

Basis for inclusion on the List: General view that long-term surplus in raw steelmaking capacity exists globally.

Products

Ethanol: Additions to global ethanol-making capacity.

Basis for inclusion on the List: Potential for displacement of U.S. exporter sales.

Transaction Characteristics

U.S. market-oriented: Products associated with projects where a significant portion of the output directly produced by the project is destined for the U.S. market and will compete directly with U.S. production. Examples include flat glass and automotive engine parts produced in Mexico.

Basis for inclusion on the List: Likely net negative trade flow implication.¹

Note: Section 2e(2) of EXIM’s charter prohibits EXIM from supporting a transaction that will result in the production of a good subject to applicable trade measures. To obtain a list of countries and products subject to applicable trade measures, please refer to the following website:

https://usitc.gov/sites/default/files/trade_remedy/documents/orders.xls.

Questions and Answers on the Sensitive Commercial Sector and Products List

1. What criteria does EXIM use in compiling this List?

This List comprises sectors, products, and transaction characteristics, which, based on EXIM’s experience with economic impact analysis, would likely have a net negative impact on the U.S. economy. For this reason, a transaction may not qualify for EXIM support.

2. How will EXIM add items to the Sensitive Commercial Sector and Products List?

EXIM staff monitors the effects of comments it receives from interested parties on transactions subject to economic impact analysis. When such comments are a contributing factor to stopping EXIM financing, EXIM staff will record: (i) the sector/product; (ii) relevant transaction characteristics (e.g., whether the markets targeted by the foreign producer are significant markets for U.S. producers, or whether the new production is coming online during a peak or trough in the business cycle); and (iii) the basis for objection cited by interested parties (e.g., potential displacement of U.S. production, or surpluses in global production capacity). The List is reviewed annually to determine if it requires revision.

3. How will EXIM remove items from the Sensitive Commercial Sector and Products List?

EXIM regularly reviews the List to determine if the reasons for including a sector or product on the List continue to exist. For example, EXIM considers industry analyst reports and consults industry experts to determine if a sector or product will continue to be in global oversupply.

4. What are the implications for obtaining EXIM financing if a transaction establishes or expands production of a sector or product deemed to be sensitive?

Transactions that will establish or expand production of items included on the List will be subject to significant scrutiny. While EXIM support is not prohibited, applicable transactions have a lower likelihood of receiving EXIM support and the case processing time is likely to be prolonged.

¹The U.S. market-oriented limitation may be mitigated based on a Market-Based Supplemental Analysis (MBSA) as contemplated by the August 2020 Economic Impact Procedures and Methodological Guidelines. See: https://www.exim.gov/policies/economic-impact