A Conversation With EXIM Bank President John Jovanovic

President and Chairman of EXIM Bank John Jovanovic discusses advancing the interests of American exporters and manufacturers abroad while securing domestic supply chains.

KUMAR: OK. Good evening, everyone. Welcome. I’m Raj Kumar. I’m the president and editor-in-chief at Devex. It is good to see quite a crowd, after a late evening last night. That was a—that was a long one, 108 minutes. And I did the usual Washington time-honored tradition of listening for my issues, my agencies in global development that we cover at Devex. And I also had another agency and another set of issues to listen for, given the conversation we’re having today. And in the 108 minutes, the Ex-Im Bank was not mentioned once, which might be a good thing, actually.

JOVANOVIC: Fine with me.

KUMAR: Right? This has been a year, this last year, a tumultuous year for lots of federal agencies. Many find themselves smaller or having more diminished roles. The Export-Import Bank of the United States has had the opposite experience. It is really undergoing a resurgence, as I think many of you in this room and following this conversation virtually know. That this is a bank that’s been around some ninety-two years. It has played an important role in U.S. history. We’re going to hear a little bit about that. But now it is a key part of U.S. economic statecraft. And we’re going to hear a little bit about what that really means.

Just in the last few weeks the Trump administration announced Project Vault with the Export-Import Bank, and a key role for building a critical minerals strategic reserve for the United States. And also, just in the last few weeks a bipartisan group put forward a bill to reauthorize an agency that, just a decade ago, was pretty unpopular on the Hill. And it wasn’t clear whether it was going to get reauthorized at that time. And a number of Republicans, people in the president’s party, were harsh critics of the agency. It has had a huge turnaround.

So the gentleman next to me has a big role as a result of this agency, and he’s leading this transformation. John Jovanovic is the president and chairman of the Export-Import Bank. And comes to the role with a lot of experience in those relevant topics, as a person from finance and business, in energy, in commodities, in building businesses, and critical infrastructure. So, John, it’s great to get spent a little time with you. Welcome to the Council on Foreign Relations.

JOVANOVIC: Raj, it’s truly an honor to be here at the Council. So thank you, Mike and team, for kindly arranging this. Raj, thank you for taking the time. I finally get to put a face to the Devex name, which has been in my inbox for quite some time. And so very much look forward to the discussion and, of course, very much look forward to the questions and the dynamic conversation that I hope we can have. Lots of familiar faces and friends in the audience, so.

KUMAR: So let’s start with the news of the day, which I think is Project Vault, right? It’s what everybody’s talking about. You know, it wasn’t long ago—it was last summer or so, last spring—that as a result of the president’s tariff announcements, the tit-for-tat with China, the Chinese government started to turn off the spigot on rare earth minerals that are critical for lots of U.S. infrastructure, defense industries, et cetera. It got so bad that the CEO of Ford said we had to close some plants. And it was, you know, hand to mouth to get access to these ingredients that make things like U.S. cars. So the lesson from that seems to have really moved this administration toward a bold new initiative. Tell people, what is Project Vault? We’re all familiar with the Strategic Petroleum Reserve. Is this akin to that?

JOVANOVIC: So before I kind of dive into supply chain security, which is a key mandate of ours, embedded, you know, in our statute and sort of in our everyday work, perhaps it’s helpful to kind of reset everyone’s understanding, euphemistically, of kind of what the Export-Import Bank of the United States does. And so ninety-two years ago Franklin Roosevelt started the bank to help resolve a key set of challenges facing the country, our economy, but also working-class Americans. And it’s very surprising how much that will rhyme or mirror the set of challenges that we and the Trump administration, I think, are trying to address today.

And so President Roosevelt said, OK, in order to properly pull ourselves out from the Great Depression, we need to create more jobs in America. We need to create more industrial capacity, manufacturing capacity in America. And in order to do so, we need to open up demand centers for our goods, our services, manufactured products all around the world. And so an export credit agency for the United States made a ton of sense, right? So let’s create those demand centers abroad so that we at home could help, you know, build more, industrialize, and have, you know, jobs created as a result.

I’m not quite sure he had the foresight to see that that same industrial capacity would then have to be mustered in the war effort only a few years later. So Ex-Im, and even the person who had my job then became Commerce secretary, Chairman Jones, during World War II, and made a tremendous impact on helping sort of liberate the world and set us on our course for where Ex-Im really started to play a role, which is delivering on the Marshall Plan, helping finance and build some of the most important infrastructure that shaped the 21st century and beyond. And so this is—this is a building that it’s just been so awesome to see our sort of reawakening all this muscle memory of our ability to do big, transformative things that move the needle. By the way, can you guys hear me, OK, even when I turn my head? OK, it must just be me. OK, perfect.

KUMAR: By the way, I think, tell me if I’m wrong, don’t you sit at the same desk that Chairman Jones used to sit at the Ex-Im Bank?

JOVANOVIC: I do. I do. It’s historically preserved. And I encourage all of you guys to come visit us and check it out. The one thing we can’t do is break the desk, because the guy who knew how to fix the desk has since passed on. (Laughter.) So there’s, like, nothing we could do. But it’s just it—and, again, it really recenters your focus and inspires you every single day to come into a building knowing that, you know, they’ve really moved and shaped a lot of the economic trajectory of the country, and the world for our strategic allies. And so it was a daunting task.

And so a little over a year ago I sat across from the president in the Oval Office at the Resolute Desk—a way better desk, by the way, than my desk, right? (Laughter.) And this was, like, a surreal experience, right, where Elon Musk sat to my right, and Susie and others were there, and his son, X, was opening and closing doors. And it was—you know, I’m used to it. I have four young children, so I kind of just tuned it out. But, you know, I said, Mr. President, I think you deserve an Export-Import Bank that’s revitalized, that, more importantly, is up to the challenges, the set of challenges that you are facing. And also said, Mr. President, I think you need something on the other end of a tariff. And that caught his attention.

And we walked through four key strategic priorities that I was at the time hoping to reorganize the bank around, reorient it. And those are the four strategic priorities that guide our work today. Number one is, let’s get the bank back to basics. What does that mean? Sort of as I outlined before, how do we help companies manufacturing in the United States, operating building in the United States, win all around the world? Now you notice I didn’t say American companies. I said companies building, manufacturing, operating in America. And that’s a key point, because everything that we do comes down to one word: jobs. We want to create jobs in America, support jobs in America. That is our—that is our fundamental objective, right? So, back to basics.

Number two, energy dominance. I know that sounds like a platitude, but let’s break down what that actually means. What it means is we want to help American energy molecules and American energy technologies win all around the globe. And we want to bring them to every corner of the globe, right? And so we could talk about some recent examples of where we started to do that at scale. Number three is supply chain security. Project Vault is, we think, the best example of that. We’ll come back to that. But I think it’s worth noting that we have a lot of—we have a domestic mandate to help bring security and stability to supply chains. Why? Because it all comes back to supporting jobs, right?

And number four is probably the sexiest and most exciting, which I hope we leave some time for today, is how do we help American companies win in the industries of the future? So we’re a part of the president’s Global AI Export Plan, led by my friend and classmate Michael Kratsios. So, again, who would have thought that a ninety-two year old export credit agency would be playing a sizable role in bringing an AI—an American-led AI bundle to the world? And, look, I was fortunate enough to serve the president in his first administration at the Development Finance Corporation, that you’re very familiar with. It was really hard to grapple with Clean Path and 5G. And clawing our way back from behind is a lot harder than figuring out how to stay ahead.

And so whether it’s AI, whether it’s dual-use technologies, which we could talk about—I know that you have interest in that—and advanced mobility, that’s what we want to do. So those are the four key priorities that we have. A lot of work, but it’s really nice to see when you give an organization a North Star if you come—and when you come visit, I truly hope many of the Council members will come visit—you walk up and down the hall, you stop anybody at the elevator bank, and you say, what are—what are the four things that we care about? They’ll be able to tell you. It’s permeated through. It’s really great to see.

And so Project Vault, right?

KUMAR: It’s by far the largest thing you’ve ever done, right, Project Vault?

JOVANOVIC: It’s funny. So the morning that the bank turned ninety-two years old we had our final board approval for the loan that we made to Project Vault, which was more than twice the size of the largest loan that we had made to date. And that afternoon we walked into the Oval Office and had the president announce it, with multiple Cabinet secretaries, multiple leads of our committees of jurisdiction, the CEO of GM, the CEO of one of the more prolific kind of mining sort of executives and entrepreneurs. And it was a really special day for the bank and a special day for America, because what we like to think our mission is, day-in and day-out, is how do we help mobilize the best that America has and put us in a position to win? And what I’ve realized is, Democrat, Republican, independent, Martian, whatever you are, everybody likes to win, right? And how does this all translate back into jobs?

And so let’s come back to Vault, because I’ve taken us off course. The president gave us a very clear challenge, just to say, you know, we have a broad-based, sophisticated plan to bring about supply chain security. One big missing puzzle piece is we don’t have a strategic reserve. In fact, we’ve never had a strategic reserve for critical raw materials that isn’t focused on the defense industry. And going back to your example, and I can name countless others, right, the number of people employed by OEMs, original equipment manufacturers, not manufacturing for defense purposes, in America is astounding, right? So how do we ensure that these companies have what they need when they need it most?

What’s the first thing you do if somebody asks you to come up with a solution? You obviously scour the globe and say, is there a good idea out there I can copy, right? Flattery is—you know, what is it, imitation is best form of flattery, right? And the challenge was that we couldn’t find a comparable framework that put America’s best foot forward. We constantly felt—and I’m so grateful for the team that we have in the building, for their creativity, for their—by the way, I’m not just talking about my political hires. I’m talking about careers. Some of them have been in the building for thirty-plus years, right? People thought creatively and out of the box with how do we start by putting an American-led initiative forward?

And so we said, OK, if there’s nobody good that we can copy, well, let’s, like, define the problem. What is the problem that we’re grappling with? The problem we’re grappling with is that these manufacturers themselves aren’t holding this inventory on hand to be able to absorb those supply shocks. OK, why? And it’s not because they’re not patriotic. It’s not because they’re not smart people. It’s not because they’re bad people. It’s simply because their stakeholders, whether it’s their shareholders, whether it’s whoever, they don’t reward this sort of behavior because it’s balance sheet inefficient.

KUMAR: It’s a very just-in-time economy still.

JOVANOVIC: Bingo. Just-in-time economy. And, by the way, I think it’s maybe—worse isn’t the right example, right? Right word. I think it’s more pervasive than that. I think we’ve lived in a world for twenty-plus years right now, give or take, that we’ve presumed we live in a cloud-based world, right? And this, I believe, is truly a revenge of, like, the real brick-and-mortar world, right?

So we said, OK. They’re not bad people. They’re smart people. Just they’re not incentivized to do anything but embrace the just-in-time inventory model. So we said, OK. There are two things we could do, Raj. We can force them to do something or we could provide them with a better alternative, or an attractive alternative, to do both, right? And so, look, going back to four children, right? I can only force my children to do something for so long. But more importantly, we wanted to do something that was future-proof and scalable. By future-proof, I don’t mean somebody’s going to want to come change it. I mean, it should be a good idea—if it’s a good idea today, it should be a good idea tomorrow, a year from now, a decade from now, right?

So, OK, fine. So we said, what are the financial incentives that drive them to embrace a just-in-time inventory model? How could we provide them with a public-private partnership where they can come to the table, they can make a financial commitment to what we call Project Vault, that’s really strategic reserve? They make a commitment to the Vault. The Vault is able to procure and hold and warehouse and handle on their behalf critical raw materials that they elect, right, in the quantities they elect, at the grades they elect. They sign up. This is really important, guys. Because what is the—like, the beauty of American ingenuity and our system is the fact that we—we’re really smart people. And you guys are way smarter than I am. If we shut ourselves in this room, we could probably think about what OEMs need and prescribe for them. I promise you would be wrong.

It’s not for lack of—it’s just they know their business better than I do, or than you do. And so we wanted it to be demand driven, led by them, by their demand signals. OK. We’ll buy it. We’ll store it. We’ll handle it on their behalf. We’ll give them access to it as needed, up to certain levels in nonemergency situations. Why? Because we want it to be a dynamic stockpile, right? And so long as they replace it, right? So we can keep the same watermark. In the event of an emergency, of course, release it all. Have it be available to them. But create enough of a financial structure where—and this is a really key component—the American taxpayer doesn’t have to subsidize it, right? Because what we learned studying all these strategic reserves is it’s where capital goes to die, right? (Laughs.) And we thought maybe there was a different way to think about it. And that’s where we are.

KUMAR: I mean, one of the reasons this is so geopolitically important is, if there were to be a conflict with China, say, over Taiwan, these critical minerals become very important is bargaining chips. Now, one practical reality I’d love to get your thoughts on is you think of the Strategic Petroleum Reserve. You know, oil stored in salt caves, you know, in the Gulf Coast. Relatively easy to do. In this case you’ve got some sixty different minerals. Some of them are very volatile. They’re not easy to store. Can you realistically stockpile these? And how do you expect this is going to work? Are there going to be stockpiles all over the United States? Will this be kind of a running inventory? Like, how will it actually function? Because Ex-Im is sort of the financer behind it, but this is really a public-private partnership. How will it ultimately run?

JOVANOVIC: Can I challenge your presuppositions first, real quick?

KUMAR: Please. Please.

JOVANOVIC: And it’s only going to make my answer harder, so it’s not going to make the answer easier. It’s actually not trivial to manage the Strategic Petroleum Reserve. And, in fact, there’s two ways to mismanage it. You can mismanage it sort of politically and financially, but then you can also mismanage the integrity of the infrastructure. And we actually—I mean, I don’t know if this public or not, but now it’s going to be public, right? I think, you know, there is some, some infrastructure integrity issue now that we’re having to grapple with, right? You know, it’s—I’ve grown up in, you know, the commodities, energy, and critical infrastructure business, and it’s not trivial to manage. But, again, that only makes your question to me more challenging, right?

Here’s the thing, another feature of our design for Project Vault was we didn’t simply want to solve one set of issues. Obviously, we didn’t want to invite a bunch of other problems, right? But we also wanted it to help catalyze other constructive things within the broader ecosystem. And so we thought a lot about this issue. And so the sixty minerals that Raj is referencing are the ones on the Geological Survey list, right? And so we also—another way where we didn’t want to tell the market what it needs, we said, OK, let’s link it to a dynamic list, which is our anticipation that list will probably grow. But if it doesn’t, there are sixty critical raw materials on it which are deemed critical, seventeen of which are rare earth elements, the others aren’t.

So there are warehouses and facilities throughout the country today that are bonded, that are up to par, and that could handle and warehouse this. That was something like low-enriched uranium for nuclear fuel purposes. That’s a whole different can of worms, right? There’s a subset of facilities that are obligated and able to store and handle that. And having, at one point in my career, owned 561,000 pounds of low-enriched uranium, you’re not getting anywhere near it, don’t worry, right, but I think—here’s another question for you, or another thought. And this is a real-life conversation we had yesterday. There was a—there’s a big kind of mining conference in South Florida that I spoke at yesterday. And we just, you know, from morning to night, back to back meeting with companies and others interested in Vault.

And one of them said, well, look, would you be—would Project Vault be able to store a subset of critical materials closer to one of our manufacturing facilities? I knew it’s a trick question, right, because it’s an obvious yes. So I said, but why would that be an issue? They said, well, there’s just not a facility there today. I said, well, OK. Well, if Vault, being—what have we created? We’ve created a big, creditworthy counterparty in the market. So if Vault wanted to commit to a new build warehouse, and we could do so on a long-term basis, because you, the manufacturer, have made a long-term commitment to us, are you asking if we can catalyze the new build, the buildout of warehouses and storage facilities in America, where we don’t have them today? The answer is a screaming yes. And that’s not by accident. That’s by design, right?

So we also wanted it to be dynamic enough where we can help jumpstart new projects, whether it’s new mines, whether it’s new refining and processing and midstream sort of operations, or whether it’s simple as there’s a need for more warehousing in America. Because the fundamental point, look, we’ve made it super sophisticated and we’ve gone into the weeds, but if you zoom out for a second the president didn’t come to me and asked that really nuanced question. He said, we need all of this. We need more of it stored in America for times when we need it most. And that achieves that objective.

KUMAR: And just maybe a last question on this, because I want to get into a couple other topics. Can this happen in a timeframe that is realistic to the foreign policy issues connected to critical minerals?

JOVANOVIC: Fundamentally this is about derisking our supply chain. In order to derisk our supply chain, we have to work with our strategic allies, right? And so it wasn’t by accident that a day and a half after the president announced Project Vault that I sat in a room at the State Department with fifty-five foreign ministers from all around the world to talk about supply chain security. I mean, the biggest summit of its kind, convened by Secretary Rubio. It was purposefully designed and built to be able to address the immediate need we have in America, which is how do we derisk supply chains that are no longer free, fair, or functioning? And how do we do so where we work as puzzle pieces with our allies, you know?

As a precursor to Vault—and, again, I have to give credit to the Australians, and many others, of course. But the Australians are very forward-thinking on how to grapple with these issues. They inherently have a tradition of metals and mining, and sort of these critical industries. They’re sort of big. They get it, right? And so the supply chain security framework that the president signed with Prime Minister Albanese, we were a core part of it because we—and, by the way, not all of these were $12 billion deals. Some of them were smaller deals. But the point is that these are critical puzzle pieces where even if you’re missing a small piece you don’t have a complete picture. And I think that’s really important when you think about supply chain security.

KUMAR: You know, this is a new era in a lot of ways in this administration around economic statecraft and a very forward-leaning approach to industrial policy. You mentioned the DFC, where you used to work. They’ve been reauthorized in a big way.

JOVANOVIC: It’s amazing.

KUMAR: I’d love to get your thoughts on sort of where does the Export-Import Bank sit within this architecture, within the DFC and the other, you know, forward-leaning entities and agencies we have in the U.S. government. How do you see that architecture today of U.S. foreign policy?

JOVANOVIC: Raj, it’s a very good question. If you would have asked me a year and a half ago, I would have told you one of the coolest things about working in the first administration was how collaborative I felt as though my work was within the interagency. This has gone to a whole new level, right? And so, particularly in the subset of kind of independent economic agencies that I think you’re referencing, you know, we have a tremendous—first off, you know, let’s start with DFC. Very complementary. I feel like sometimes I’m the best salesman for DFC. And my friend Ben Black is the CEO over there, so I remind him of that constantly. But, you know, oftentimes I’m meeting with a CEO, or we’re meeting with a foreign head of state, or finance minister, energy minister, or an economy minister. And they’re describing a problem, or a need, or an opportunity to engage with the United States.

And I look at him. And I’m smiling. Or I look at her and I’m smiling. And I just say, have I got the perfect place for you to go, right? And that’s OK, because I don’t want these people to burn an extra calorie of their time or effort or spend an extra penny of their money if they don’t have to, to achieve our mutual strategic objective, right? So, tremendous amount of complementary tools with the DFC. I would add the Office of Strategic Capital, the Department of War, which is just—it’s earth shattering how innovative, how robust, how quickly they’re moving. I’m very close to the guys there.

But more importantly, it’s one thing to have at the principal levels a good channel of communication or openness or discussion. We make sure that people in our buildings work together every single day. That connective tissue is mission critical. And, by the way, that includes the Commerce Department, Treasury Department, State Department, National Security Council, National Energy Dominance Council. And that’s been great. Look, supply chain security is an easy place for that to happen, but, you know, in areas of energy, in areas of other industrial needs, in AI, right, when you throw in, you know, Kratsios’ group. It’s really great to see that connective tissue come together.

And, by the way, it’s not an area that’s, like, hyper-polarizing or political, with an uppercase P, right? Because, you know, for instance, with Project Vault, before the president announced it, when it was finally ready for showtime, I mean, we spent a lot of time socializing that on the Hill. We had sometimes second or third briefings with ranking member staff, right? We voluntarily did this well beyond our committees of authority—I’m looking at my team, they’re nodding, exhausted, back there. But it was the right thing to do, right, because these are things that, again, we hope we’re building structures and frameworks, and doing things that will serve us for decades to come, and solve these issues in a sustainable way.

KUMAR: So, speaking about the Hill, you’ll need to get reauthorized by the end of this year. The last time around, I mentioned in my introduction, it was tough. A lot of people on the Hill, particularly from the Tea Party crowd, the Freedom Caucus, they thought of the Ex-Im Bank as the Bank of Boeing, they would say. It was kind of corporate welfare. It was working with just the biggest companies in the world. What are you hearing today when you talk to people on the Hill? Has that perception changed? And what do you want to see in the reauthorization? What has to change in terms of what congressional authorities you get?

JOVANOVIC: So, first off, 180-degree change, on both sides of the aisle by the way. So, you know, we’re dealing with a unique set of challenges in America and the world that requires an economic tool like Ex-Im to work in conjunction with the other economic tools, right? So, you know, we can’t be everything to everybody, but we have to show up every day and reach our potential with what we have, right? And so very different conversation. I think there’s a deep understanding too that—you know, it’s funny. Like somebody had asked me this question today. And they said, you know, sometimes you guys do small deals. Why would you ever do small deals? How are you going to fix big problems by doing small transactions? And I kind of laughed. And I flipped the script a little bit. And I said, OK, what does it mean to help a supply—what is a supply chain, right? A supply chain is a series of companies working together to contribute to the same objective, to yield a given cohesive, consolidated output, right? We need a bunch of small companies to do that, or smaller companies.

And so 90 percent of what the bank does all day every day is actually work with small, medium-sized businesses. Ninety percent of the transaction volume, right? We just do a lot more of it, and we have whole teams all across the country that do it. Why? Because 95 percent of companies in America are small, medium-sized businesses, right? So the some of the—some of the critiques that were lobbed—you know, sort of, you know, lobbed at the bank, there was a—there was a misunderstanding, right? But also, more importantly, I think it’s a very different set of challenges and political environment. Look, more Democrats voted for me than against me coming out of committee, right? Wasn’t any less polarizing of an environment. By the way, it’s not because they like me, it’s because they see value in what the bank is doing.

And so, coming back to your question on reauthorization, here’s the good news. There is a lot of interest, and effort, and enthusiasm coming from both sides on the Hill wanting to help Ex-Im modernize and give us more tools. That’s the good news. Now what we’re trying to do, you know, tactically, is bifurcate that process from reauthorization. And one would think that’s counterintuitive, right? Wouldn’t you just kind of want to do the whole thing, and pressure makes diamonds, and all that? And I get that. But what we’re seeing is we have $71 billion, with a B, worth of transactions in the pipeline today. It’s probably grown. That’s probably an old stat from a week and a half ago, right? We don’t want to put that at risk.

And so we are pursuing what we call probably, we got to figure out a better euphemism for it, but it’s a skinny reauthorization, right? Where we’re effectively moving the dates out. We’re ensuring that there’s continuity of work. We’re fixing a few sensible flaws. I’m happy to call them flaws because I don’t think they were—they weren’t thrust upon the bank hoping that the bank would succeed, right? Eighty-plus years of, you know, operative history said that you need these features, and now all of a sudden you didn’t. So we’re going to shed those. That’s our anticipation, our hope. And it’s really great to have a bipartisan bill put forward. It’s really great to have the support we have on both the Senate and the House side.

And then, look, that’s the—that’s not the beginning of the end. That’s the end of the beginning. And we very much look forward to adding a bunch of tools, clarifying a bunch of things. Look, going back to your defense question, right, define a defense company today and define one ninety-two years ago, or nine years ago. Am I asking for us to, you know, export kinetic weaponry? No. That’s insane, right? Like, you know, the White House and the State Department and the Pentagon should make those decisions. But from our side, you know, we want to ensure that we’re able to support dual-use technologies, things like that. We’re confident we’ll get there, because there’s so many pieces of legislation moving, Raj, that want to give us additional tools. But we want to keep the main thing the main thing and ensure that we don’t lose any of the momentum.

KUMAR: We’re going to come to the members for questions in just a second. So as you’re thinking of those, just one quick follow up on reauthorization. One tension point has been the U.S. content rules. And you talked about your fourth priority for the agency is really the technologies of the future, think AI. Historically, the Export-Import Bank hasn’t really done that much in the technology area, certainly in the software area, partly for this issue of what counts as U.S. content. You know, is it where the company sits, where the IP sits? What happens when it’s in the cloud, right? So isn’t there some tension between the rules that exist now under U.S. content and where you want to go in terms of supporting U.S. export of advanced leading technologies?

JOVANOVIC: The great part of where we sit today is this is, by and large, addressed in the 2019 reauthorization, right? With the China and Transformational Exports Program. And an understanding that you needed to be able to have some flexibility inherent in it. Again, but fundamentally coming back to the core premise of is what we’re doing advancing the support or creation of more jobs in America? And if the answer—the answer kind of always leads back to that kind of key litmus test.

KUMAR: OK. So we’re going to go to questions from the members. Just raise your hand. I think we’ve got a microphone to come around. I’ll ask you to keep it relatively brief. I’ll remind you, it’s on the record. Let us know who you are and where you’re based. Go ahead. There’s the mic coming to the gentleman the back. Then we’ll come up here to the front.

Q: Mark Kennedy from New York University.

We’re talking about supply chains. And much of what we’re exporting is in all U.S. To really do it right, you need to have more collaboration with your partners—Japan, Korea, Europe. What kind of efforts are we making to make sure we’re collaborative with partnering with others to get more of a Western tech out there, not just U.S. tech? And oftentimes it’s needed in order to get the U.S. tech components out there.

KUMAR: Yeah. Is this a friendshoring or is it really just U.S.?

JOVANOVIC: It’s a great question. I’m going to—I’m going to answer it with two very specific, but I think relevant, of points. First things first, the collaboration with strategic allies, especially the ones that you’ve named. One of the great things has been convening around the shared challenges that we face, particularly around supply chain security. But that’s not the only place it happens, right? It just happened at the global AI summit where, unfortunately, I wasn’t able to attend, but senior folks from the bank were there.

You know, two weeks before we announced Project Vault, Secretary Bessent convened a G-7+ ministerial on supply chain security, where all of our key strategic allies had their finance ministers in the room. And he was kind enough to not just invite me, but Ambassador Greer and a couple of others. And that discussion was incredibly, not just enlightening, but very action-oriented, right? And focused on how can our puzzle pieces come together to fix what is a shared problem, right? If you have markets and supply chains that don’t function, that aren’t predictable, that are susceptible to, you know, manipulation en masse, which it sounds like you’re—based on the detail of your question, like, you’re very familiar with the problems—you have to work together to fix them.

And I would say, on the second piece that I’d like to offer on this point, is in some cases, particularly as we think about the critical minerals value chain, it’s going to be near impossible in the near term to make a dent in these issues doing it just within the United States. So we have tools like the Supply Chain Resiliency Initiative, which allows us to help finance projects outside of the United States that pair with the amount of offtake and resources that are coming to America. But what’s been great to see—and, again, I reference some of my colleagues who have been in the office and been in our building for thirty-plus years—they’ve never seen this level of interest in investing in America, right?

And figuring out a way to deepen those economic ties within the lower forty-eight, and sometimes—definitely—what am I talking about? Alaska is a huge piece of that. So in the fifty United States, right? And coincidentally, one of those storage facilities was in Hawaii. So I take that back, all of my friends from Hawaii. So all fifty states. But your point’s an excellent one. And it’s front and center in terms of our focus.

KUMAR: To that point about needing allies, I’d just commend to you a report by the Council on Foreign Relations, I think a week ago, by Heidi Crebo-Rediker and others, on U.S. innovation in this area, using recycling of existing electronics and magnets to find a way to get over that hump of not really having the right domestic sources for some of these materials.

JOVANOVIC: So, only because this is fresh in mind, yes, but, OK? So, you know, how deep do we want to go into this?

KUMAR: Just brief, because I want to get our colleagues in here as well.

JOVANOVIC: Has anybody heard of the term pig iron? Oh, I love it. Yes. My kind of crowd. I love it. OK, so the number-one source of pig iron in America is actually recycled pig iron. However, if you continue to recycle the same underlying feedstock, you degrade the underlying characteristics which allow it to be fortified enough to be used in critical use cases. And, oh, by the way, you want to build a ship, defense purposes, can’t use recycled material, right? So, again, that’s not to say that we aren’t really thinking about how we can have a sort of an ecosystem that relies on recycled material too, but we’ve also got to be conscious of some of its limitations. So that’s my, like, super nerdy thing for the day. And we’ll stay high-level and interesting from now on.

KUMAR: This is the right audience for that super nerdy stuff. We’ll come right here to this first table.

Q: Thank you very much. Vijay Vaitheeswaran from the Economist.

Thanks for speaking to the Council today and explaining the administration’s policies.

KUMAR: This is my second time speaking to the Economist today.

Q: That’s right. You know, we’re always here. We’re everywhere.

The question I have concerns, specifically on critical minerals, the range of policies announced so far. The heart of China’s control over critical minerals is the control it has on processing, which is historically a capital-intensive, dirty, low-margin business. One where they’re willing to drop prices as necessary to maintain market share. Can you tell us, for that particular part of the value chain, what is the administration’s strategy to break China’s dominance or abuse of that part of the value chain? Thank you.

JOVANOVIC: Fundamentally, this entire initiative and effort is to derisk our supply chains and the supply chains that we rely on, right? A key part of derisking it is to ensure that there is access to reliably priced and reliably available midstream refining and processing capabilities, right? So that’s the problem, front and center. The way we address it is multifaceted, right? Number one, obviously, that the simplest one to describe but the most challenging and probably long-term one to effectuate, is how do we build more greenfield and return and regenerate brownfield assets, refining processing capabilities, here in the United States? It’s a big area of focus. And, by the way, that’s not just a big area of focus for us. That is a multiple government agency coordinated effort, coordinated by the White House and the National Security Council, to do that for defense purposes and non-defense purposes, right? So what my colleagues at the Office of Strategic Capital are doing is complementary to what others are doing to help, you know, the civilian OEM use cases, right? So that’s one.

Number two, going to our strategic allies, friendshoring, nearshoring, however you want to describe it. But this is where partnerships like the one we have with Australia, but a whole slew of opportunities we’re evaluating the Western Hemisphere are very important as well, right? So this is where it’s complementary to try to fit those puzzle pieces together. Thirdly, coming back to Project Vault, right, so let’s say you’re an original equipment manufacturer. And you’ve deposited raw material on the Vault that over time you want to convert to finished material. Well, we are designing, and we’ve designed, the structure so that we can actually enter into a tolling arrangement on your behalf, right, where over time now instead of having dead capital holding static raw material, now all of a sudden we have value-creating, value-added processing enabled as a result. So and I’m only scratching the surface, right, because there are so many different financial products out there. There’s permitting and fast tracking that by FAST-41. There are a broad set of toolkits that I’m just scratching the surface on, but I know there are other questions. And I know you’ll talk to me again, so it’s fine.

KUMAR: Just to be—just one. I think the Chinese are unwilling to export their processing technology, is that right? And they currently process 90-plus percent of the world’s critical minerals?

JOVANOVIC: Look, I think there is—there is ample opportunity to have new entrants sort of enter into the market. And we’re doing our best to ensure that we have a healthy and reliable supply chain.

KUMAR: Got a question over here.

Q: Thank you so much. I’m Matt Aks with Evercore.

This picks up a little bit on the last question, but I wanted to ask about Vault specifically, how it’s going to handle volatile mineral prices. I think you said that the manufacturers could set the quantity at which they want to buy from you, but I’m curious how they—you think about price. And, you know, who’s taking the risk of these prices kind of moving around a lot at the end of the day? Thanks.

JOVANOVIC: It’s an excellent question. And so one of the challenges—again, where I said we didn’t want to invite a whole set of problems when we were trying to put forth a solution, one of them was this issue. And so the way we engineered around this was, when you’re an equipment manufacturer, you come to the Vault. You say, hey, I want you, on our behalf, to procure X amount of tons of Y grade of Z commodity. And I want you to hold it for us for ten years. The way in which we effectuate that transaction is you agree to repurchase it from the Vault in ten years at the same price, plus a modest cost of carry which simply, like, covers the cost of operations and handling. And so that’s the way that we flattened the price volatility.

Because you’re right. Look, for some of the bigger base metals we made the argument to ourselves, hey, we could just hedge this, right? But for any one of the seventeen rare earth elements, forget it, right? These are—these are thinly traded, very volatile markets, very much set by a few number of actors. Going back to uranium for a second. You know, this is where, as a young guy, you know, some of my hair went gray, right, because there are a couple of actors in that market who could really shape the price curve. And that’s the way we addressed it.

KUMAR: And, in the end, is there some kind of a subsidy built in? Are the OEMs subsidizing the long-term security of the supply chain?

JOVANOVIC: They’re not—I would rephrase it, right? Vault is providing OEMs with a value-added service, right? They’re doing something off balance sheet that doesn’t pay to do it on balance sheet. There’s a cost to that. Again, it’s America, right? So it’s a very modest cost. It’s attractive to them. And the nice part about it is this isn’t just designed for the largest companies in the world, the household names that many in this audience would recognize. By way of having those companies deposit in the Vault at scale will actually open it up to those who don’t necessarily have as good of a credit profile. And for them this may actually—this will probably be balance sheet accretive, to use some other core terminology, right, because the weighted average cost of capital that Vault enjoys and will enjoy in the market is higher than theirs, or better than theirs, rather.

KUMAR: So I got a question here in the front, and then another one in the back.

Q: Good evening. Rob Edwards, formerly J.P. Morgan Global Commodities.

And I noticed that you spent some time with Mercuria. And I think—

JOVANOVIC: I’m a recovering commodities guy.

Q: Yes. And I think it’s a follow-on to his question, which is: What role do you think the commodities houses will play in making Vault an economic success? We’ve been talking about the OEMs that need it. We talk about the people who are mining it and putting it in the Vault. There’s a whole world of intermediaries out there. And you’re very familiar with those. What is your vision on those participating in this?

JOVANOVIC: Because I’m a recovering commodities guy I won’t be offended, but I don’t want you to be offended, please. We’ve just met. This is designed to be a very boring, vanilla business for commodity traders and other intermediaries by design, right? And so one thing, again, going back to we didn’t want to create more issues or invite more problems than we solved, what we didn’t want to do was have any free riders or create any scenarios where whatever you own in your inventory on your balance sheet at some really low cost basis you can kind of dump into our reserve, right? No bueno, right? Not what we want.

And so what we’ve done is designed a governance framework whereby we are aggregating the demand from the OEMs, anonymizing it—which is really important, right? It’s also important because at the table brainstorming with us were, like, fierce competitors, rivals, right? So the last thing that, you know, Paula wants is for you to know what she’s buying or what she’s most vulnerable—what she feels most vulnerable about in her supply chain, right? So, OK, once that’s anonymized, now let the best price at the best grade at the most immediate availability win.

And so we were fortunate enough to—and I inherited a process that was already, you know, in stream. And so we had really great, sharp, smart commodity guys around the table. And that was terrific. And they contributed a lot. But understanding that, like, this was—there was a desire for transparency and price efficiency. And so that’s sort of how this is done.

KUMAR: A question all the way in the back.

Q: Good evening. I’m Mvemba Phezo Dizolele with Dizolele Advisory. Thank you very much for—

JOVANOVIC: I’m sorry, which advisory?

Q: Dizolele Advisory.

JOVANOVIC: Great.

Q: Thank you for your presentation today.

My question really is about the supply side. We know where the minerals are, the so-called critical minerals. They are in the Global South, for most part—the most part. They’re in DRC, they’re in Angola, they’re in all these places where the U.S. has not seemed to care for the last several years. So today, the U.S. is determined that these are critical, Project Vault being one of them, and so on. What is it that your strategy will change, considering that the Chinese already there, they have a different type of relationship with these countries. They’re eager to finance. They’re eager to derisk. Last I checked, Ex-Im Bank has a very small footprint all over these areas. And when you talk about strategic allies, who are these? Do you consider a potential for these countries who are home to these resources to also be your strategic allies? Or is this something that is purely U.S. and Western-centric, that you’re going to miss the boat again? Thank you.

JOVANOVIC: Deeply appreciate the question. And, again, at risk of offending a new friend I’ve just met, I’m going to challenge some of the—some of the things that you said, and just maybe sort of iron them out and correct them. So, first off, some of the areas that you’ve mentioned are areas where we have a tremendous amount of capital deployed. In particular, Sub-Saharan Africa is not just important to us, it’s built into our statute, right? We have an entire advisory committee that I’m convening focused on Africa. Of all of the—you know, I don’t—you know, my wife and four children that I mentioned a moment ago. I don’t really see them often, but I see heads of states, and prime ministers, and finance ministers, and ministers of energy, and mining, and economy. I’ve seen more from Africa than any other continent over the past six months.

And let me take the opportunity to also brag about some of my colleagues in the interagency. I think what DFC is doing in Africa is incredible. And I think it’s just the beginning. I think what you’re going to see, and you’re already seeing OSC do in Africa, is incredible. And it’s a very consistent message that I hear from our friends and our partners in Africa. Which is, thank you for caring about us again in a way that empowers us, right, and brings us to the table as a partner. And, by the way, going back to the first question from our friend, you know, they know what’s bad for business and for what’s bad for their industries, especially those economies that rely on these extractive industries, right? You know it better than I do, I’m sure, given your advisory business, right? And so they want markets that are free, fair, and functioning, because it’s not good for the long-term viability of their economies.

Even if they want to diversify, that takes time. What they want is they want good partnership with the U.S. The outstretched hand that we have given Africa is, I think, a gamechanger, right? And the type of transactions and the type of partnerships that you’re seeing forged are very real. And so they are at the core of what we think about when we describe strategic allies, and fully conscious of the fact that, especially with a subset of those sixty minerals that we described, the best, highest-grade resources are on the continent. And it’s an area where we definitely want to leave our mark in a very constructive way.

KUMAR: Can you just say specifically, though, is there—what’s the value proposition for countries in southern Africa? Right now, they are dealing with China who’s taking those raw materials, processing them in China. You’re trying to build through, Project Vault, some of that processing capability here in the United States. Are you going to be doing the same thing? Or, through a tool like DFC, is the United States going to be investing in processing domestically in those countries, even as you invest through Ex-Im here in the United States?

JOVANOVIC: Let me zoom out for a second, OK? You’re in an extractive industry. Your household relies on an extractive industry. There are three ways to make more money, right? Number one, you get more—you are able to sell whatever you’re selling per ton for more money, right? So if you’re reliant on a market that isn’t free, fair, or functioning, right, where somebody can come in and exercise their market presence to either depress that price or raise that price in ways that are entirely unpredictable for you, you can’t make investments. You can’t plan ahead. Not good for business, right?

Number two, as you said, if you’re in an extractive industry the best way to make more money is to then do the next step in the process, right? Well, in some of these places, given the partnerships that they’ve forged, that becomes prohibitive. They can’t do it. So, going back to the question of are we trying to catalyze, you know, midstream processing and refining, while trying to do more in America, of course, trying to also get our allies to do more of it so our puzzle pieces come together in a way that, you know, yields supply chain security, absolutely. That’s it, right?

And then number three is, you know, how do you have a partnership that goes beyond the extractive industry that you’re describing, right? And I think that’s a lot of what is in, you know, Secretary Rubio’s plan, what’s in the National Security Strategy, right, which is, you know, a very, very clear document in how economic security and cooperation will play a role in effectuating, you know, this foreign policy.

KUMAR: But let’s bring Paula in the front to the discussion.

JOVANOVIC: Paula, you get to ask me questions all the time. Come on. (Laughs.) I’m kidding.

Q: Thank you for coming.

And if I make a quick comment, Raj, you asked the question about the integration of Ex-Im Bank in the interagency process, and the policy process overall. I have to congratulate you. I mean, just even what you’ve shared with us here, I mean, it’s as day and night. I mean, from what you were describing, of course, before, and the Hill, congratulations. I mean, just listening to the projects, listening to who you’ve been meeting with, what you’ve been leading. So that’s outstanding.

I want to take you in a slightly different direction, and that is, I think Ex-Im recently worked with Westinghouse and Bechtel and in Poland in the nuclear space. Could you talk a bit about what you are doing in that area, nuclear, not just only with them but with other countries?

JOVANOVIC: Absolutely. And so, Paula, first off, thank you not just for your friendship, but for the tireless service that you’ve given Ex-Im and to America, writ large.

So, Poland, very fresh in mind. I met today with the minister of energy, who’s here. We discussed the project which I believe is, if my memory serves me correctly, $17.6 billion worth of debt financing needed to build the first AP100 (sic; AP1000) in Eastern Europe, where Poland is where it’s meant to be. If we come back to sort of the economic ties that bind, right—and this is why—this is what kind of goes oftentimes, you know, not fully appreciated about the president’s energy dominance agenda, is it is best suited to further deepen and forge stronger economic ties with our strategic allies. Because there is no more important or foundational of a decision for any country to make than how it’s going to plan for its energy supplies. Not just in the next one to five years, but in the next fifty years.

And nuclear is the poster child for how we build that connective tissue in a way that really stands the test of time. And so we’re talking about a supply chain that is highly regulated, highly sophisticated, but is not something that you build and turn off ratably. And so it’s been wonderful to work with not just Poland, but many other countries that recognize the value in partnering with American technology and going through the process of building that nuclear relationship. And if we zoom out and think about what are some of those industries that are changing and are going to continue to change and shape the future for us? They all require a tremendous amount of baseload electricity generation. And nuclear is a great way to solve it.

KUMAR: We talked about nuclear. We talked about LNG molecules. What about solar and battery technology? You know, that’s another area where China is totally dominant. And the Biden administration was using the Ex-Im Bank, making this a priority. Obviously, this administration has a different view. What do you see as your—in your energy dominance picture, where do solar and other renewable technologies fit in?

JOVANOVIC: It’s funny, coming back to supply chain security and, you know, ensuring that American companies win all around the world, we have potential transactions in the pipeline in both of those sectors, right? So it’s a key piece. I mean, if you want to build—if you wanted to construct a new build gas-fired power plant, batteries are just as valuable for you as other use cases. Why? Because it yields incremental efficiency. It helps flatten some of the ratability. It’s like we want American companies to win in every single one of these verticals, agnostic to sector, especially when it comes to where we can win in all corners of the globe.

KUMAR: Just looking to see if we have any other questions. We do. One here.

Q: How you doing? Thank you for being here. My name is Corey Jacobson. I’m with K2 Space, which is a space startup out of California. In my past life, I was the chief of staff at the Office of Strategic Capital. So really appreciate your—

JOVANOVIC: Oh, amazing. What years were you there?

Q: I was there ’24 to ’25. So basically ’24. Left January 20.

JOVANOVIC: Awesome. Thank you for your service.

Q: Yeah. And so it’s great to hear you lavishing some praise on OSC. And it’s—you know, when I was there we saw the kind of inklings of interagency cooperation process in place between these different federal credit agencies that could bring these powerful tools to bear. As you’ve alluded to, that cooperation has gotten much deeper. But it’s not always so easy to say this is more in DFC’s lane, you should go talk to them. Sometimes there’s some kind of overlap in that Venn diagram. How are you thinking about more kind of collaborative deals, with these different agencies all kind of playing a part together?

JOVANOVIC: It’s great point. You jogged my memory, because I left out a very key counterparty, which is the Department of Energy, who we spend a lot of time with. So, first off, I think we are doing things that have never been done before. And, for instance, the first transaction I signed off on and authorized as chairman that we approved was a partnership with the Department of War. Never happened before, right? And it was a critical minerals refining facility, processing facility rather, in western Pennsylvania. Again, we are—we are open to doing projects together.

Relative to DFC, I think the swim lanes are pretty clear and distinct, right? So we have very little overlap. And so it’s easy to kind of direct traffic there. The area that’s really fascinating for guys like you and guys like me is actually in the Department of War side, because they have so many powerful tools that we don’t have. And that’s OK, because we want to keep the main thing the main thing, right? And what we do, we try to do the best we can. You know, they’ve demonstrated the ability to be an off-taker. Incredibly powerful. They have equity, you know, capabilities, as does DFC. We don’t. That’s OK. No equity envy over here, right? We just want to make sure that we find ways to work together.

And so, that’s—so to answer your question directly, we’re not shy about it. And we seek opportunity. And the best way to find opportunity is to overcommunicate about what we’re all looking at. Because I’m sure what you remember as a key challenge when you were there is people venue, shop. You’re laughing, right? If it wasn’t so painful it’d be funny, right? So it’s, like, you know, somebody comes to Raj. Raj says no. So they come to me. So they come to Paula, right? So I think it creates a lot of efficiency in the process as well, and it allows opportunities to shine where we can cooperate.

KUMAR: Mike Froman is with us. I’d love to get the mic to him.

JOVANOVIC: Oh no. Mike gets asked a question too? (Laughter.)

Q: First of all, thank you for coming. It’s great to have you here. And really appreciate your engagement with the Council.

As Raj alluded to earlier, people used to talk about Ex-Im as corporate welfare. And there’s been a long debate now about the relationship between government and the private sector. You’re a private sector guy. You’ve also spent time in government. What’s the appropriate role for government intervention in the private sector? And are you comfortable with the approach that either the Biden administration has taken, or the Trump administration has taken in terms of subsidization, taking equity stakes, getting directly involved in private companies going forward?

JOVANOVIC: Good question. Mike. I’m going to speak very directly about Ex-Im’s role in this ecosystem, right? Big misconception about Ex-Im is that it was corporate welfare, right? Except the facts point to a very different reality, which is since the new accounting rules came into effect, since 1992, billions of dollars of debt has been repaid via the U.S. Treasury, recycling our profits, right, at the default rate that is laughably low, below 1 percent, right? So if you ask me ideal situations in which government capital should play a role, let me start by saying what it shouldn’t do. It should never crowd out the private sector, right? So, and again, it’s sometimes painful from the time, effort, and resources we put into transactions. The best possible thing that can happen is we work on a deal, it gets to, you know, the ninety-ninth point in the process, and they find a private capital solution. We’ve done our job. Our job is to catalyze more private sector capital, more capital formation in strategic areas that help create and support more jobs in the United States. That’s our game.

We’re not JPMorgan. JPMorgan’s great. Citi’s great. We’re not a private equity fund. We’re not a credit fund. Those guys have a distinct role in the play, and we want them to play it to their best capabilities. But for us, it’s about how do we catalyze capital formation in the right places, and how do we do so in a way that keeps the American taxpayer at the front and center? And so the most challenging job of allocating capital, whether it’s—you know, this is way more stressful, Mike, than any job I’ve had deploying capital in the private sector. And that’s not to say that I didn’t stay up at night worrying about my fiduciary obligation to, you know, my investors, or to capital providers. It’s that our fiduciary is the everyday taxpayer. It’s not—you know, sure it’s the it’s the really sophisticated, smart, talented people in this room. It’s also the hardworking people outside, who have never heard of Ex-Im, who work very hard, who pay taxes every day, and want to ensure that their money isn’t wasted. And it’s something we take very seriously. And our hope is that there’s an asymmetric benefit to every opportunity we have to put money to work. Because if there isn’t why are we doing it?

KUMAR: In just the minute we have left, to that point of your ultimate stakeholder or shareholder here, should Ex-Im be taking more risk? I mean, given the new era you’ve described, and the critical foreign policy and national security issues you’re engaged in now, a 1 percent default rate sounds awfully low. And I think your legislation only authorizes a 2 percent default rate. As you look at reauthorization, is this something that, even within that skinny approach you’re taking, you’re going to fight for?

JOVANOVIC: No. Not because—look, every capital, you know, provider wants to be able to take more risk. But what we’re asking for isn’t to take 2 percent and raise it. We’re simply saying, what happens when you hit 2 percent, right? And over the course of, you know, some of the more contentious reauthorizations, people who didn’t wish the bank well, I think, thrust upon it conditions that are, like, totally out of whack with any market standard or any, you know, sense of reality or sanity, right? And so, you know, all we’re saying is that, hey, you know, we’re the only ninety-two-year-old institution that grapples with infant mortality on a daily basis, right?

So, you know, what happens when we reach 2 percent? Nobody wants to reach or exceed 2 percent. Don’t change the goalposts, just let’s have a reasonable process in place to help remediate. Because, guess what? Even the best, most capital-prudent banks around the world, all day every day, have banks that default, right? But that’s the beginning of the story, is what are the remedies in place? How do you help work through it? How do you get them back to performance? And so it’s this—avoiding this binary issue I think will really allow us to do even more, to be more aggressive, and, honestly, to help move the needle, because that’s desperately what we need.

KUMAR: Well, listen, if it wasn’t clear to everyone that it’s a new day at the Export-Import Bank, I think it is now. Thank you, John Jovanovic, for taking some time to be with us at the Council on Foreign Relations. (Applause.)

JOVANOVIC: Thank you so much for the time. I really appreciate it.

KUMAR: And thank all of you.

(END)

This is an uncorrected transcript.