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How to Make the DFC an ‘America First’ Agency

The Trump administration has a rare opportunity to reimagine the U.S. International Development Finance Corporation (DFC), a relatively obscure, well-funded, bipartisan-backed federal agency. If handled strategically, the DFC could become a powerful instrument to promote U.S. foreign policy interests, bolster American businesses in key regions, and create jobs at home. In particular, the DFC holds significant potential to counter China’s expanding global footprint by offering competitive financing for infrastructure and development projects in nations targeted by Beijing’s Belt and Road Initiative (BRI). The agency could also prove indispensable in rebuilding a post-war Ukraine.

However, the DFC is caught between conflicting mandates: fostering economic growth in fragile economies and serving U.S. geopolitical goals. On one hand, the agency is tasked with driving development in the world’s poorest regions. Conversely, it is expected to leverage financial resources to advance U.S. diplomatic priorities by strengthening alliances and promoting stability in strategically critical areas. This dual purpose has led to persistent tensions in how the agency operates. Policies that align with U.S. foreign policy do not always result in sustainable development, leaving the DFC to navigate a precarious balancing act.

The agency’s origins trace back to the Overseas Private Investment Corporation (OPIC) creation in 1971. OPIC’s mission was to promote private-sector investment in developing nations while advancing American business interests. Over time, however, the agency shifted increasingly toward developmental aid, sidelining U.S. commercial priorities. This culminated in the 2018 passage of the Better Utilization of Investments Leading to Development (BUILD) Act, which reconstituted OPIC as the DFC. Under the BUILD Act, the agency has prioritized projects in low-income and lower-middle-income countries, as determined by a World Bank classification of gross national income (GNI) per capita. Projects in upper-middle-income countries require special waivers, while those in high-income nations are outright ineligible.

This framework has yielded significant limitations. Consider Panama, a nation of critical geopolitical importance to the U.S. Despite the strategic potential for U.S. investments—such as port infrastructure to counter China’s influence at the Panama Canal—DFC programming is off-limits due to Panama’s classification as a high-income country. Similarly, Guyana, which has emerged as one of the world’s fastest-growing economies following a 2015 oil discovery, now possesses a GNI per capita that makes it ineligible for DFC support. Yet China has capitalized on this opportunity, investing heavily in Guyanese infrastructure, mining, and energy. Another example is Romania, a NATO ally and one of the European Union’s poorest member states. With its strategic location bordering Ukraine and housing the Black Sea’s largest port, Romania’s relevance to U.S. foreign policy is undeniable. Nevertheless, DFC’s current rules render projects there largely ineligible.

‘Don’t Throw the Baby Out with the Bathwater’

The good news is that the DFC is far from a lost cause. Transforming it into an ‘America First’ agency requires no drastic overhaul. With a few targeted adjustments, the DFC’s existing suite of financial tools—including loans, insurance, and equity investments—can serve a revamped, U.S.-centric mission. While the agency’s development-oriented focus has deepened over time, its role in advancing U.S. foreign policy and national security remains embedded in its operations. One notable success story is Georgia, where the DFC has financed projects across various sectors, including energy, infrastructure, and hospitality.

Several structural modifications are needed to align the DFC with Trump’s ‘America First’ agenda. First, its legislative mandate—currently up for reauthorization in October—must be reshaped to prioritize U.S. strategic interests. In July 2024, the House Foreign Affairs Committee approved bipartisan legislation (H.R. 8926, the DFC Modernization and Reauthorization Act) to update the BUILD Act. Among the proposed changes are adjustments to the income classifications that govern DFC eligibility, granting the agency more flexibility to support projects in strategically important countries.

The bill also introduces a new Vice President for Foreign Policy and National Security, whose duties include fostering relationships within and outside the agency to ensure U.S. foreign policy and security interests are integrated with development goals. Additionally, the legislation raises the DFC’s maximum contingent liability cap from $60 billion to $120 billion, significantly enhancing its capacity to act as a foreign policy instrument.

These are positive developments, but they are insufficient to establish an ‘America First’ framework. The reauthorization must explicitly reorder the DFC’s priorities, placing U.S. national security and economic interests above its developmental mission. Without such clarity, institutional inertia and bureaucratic norms will likely perpetuate the agency’s focus on economic development abroad, often at the expense of American businesses and workers.

Redefining Priorities and Metrics

To fully embrace Trump’s ‘America First’ mandate, the DFC must adopt a new project evaluation framework emphasizing three key criteria: support for U.S. foreign policy objectives, benefits to U.S. private-sector businesses, and job creation within the United States—particularly in manufacturing. While developmental impact should remain a factor, it must be secondary to these core priorities.

Achieving this shift will require closer collaboration between the DFC and other U.S. agencies, including the U.S. State Department and Congressional oversight committees. The proposed Vice President for Foreign Policy and National Security should be granted significant authority, including the power to approve or veto high-value projects.

Moreover, the agency’s reliance on World Bank GNI classifications to prioritize countries must be reexamined. Instead, the DFC should adopt a more strategic approach, identifying critical sectors (such as energy, minerals, and logistics) within regions of heightened geopolitical relevance. A proposed “Rapid Deployment Program” could streamline the approval process for high-priority projects, ensuring swift action in sectors and locations that align with U.S. interests.

This reorientation will require a cultural shift within the agency’s bureaucracy, which has evolved to resemble multilateral development banks. Nonetheless, the stakes are too high for half-measures. The DFC is uniquely positioned to advance U.S. foreign policy in an era of intensifying great-power competition. By prioritizing national security and economic interests, the agency can counter the unchecked spread of Chinese influence while delivering tangible benefits to American workers and businesses.

In sum, the DFC must not be allowed to drift further into the margins of U.S. strategic priorities. Its reauthorization presents an opportunity to redefine its mission in service of America’s global interests. The question is whether policymakers will seize it.