Canada Markets closed

Trump administration opens investigation into uranium imports, potentially teeing up new tariffs

Tom DiChristopher

The Commerce Department is opening an investigation into whether imports of uranium — the chemical element that fuels nuclear power — pose a risk to national security.

The new probe marks the Trump administration’s latest use of a 1962 trade law to scrutinize imports. President Donald Trump has placed tariffs on foreign steel and aluminum following an earlier investigation, and the Commerce Department is conducting a review into auto imports.

Commerce is taking action after two American uranium producers, Energy Fuels and Ur-Energy, petitioned the department to investigate whether the dominance of imports in the U.S. uranium market raises national security concerns.

“Our production of uranium necessary for military and electric power has dropped from 49% of our consumption to 5%,” Secretary Wilbur Ross said in a statement. “The Department of Commerce’s Bureau of Industry and Security will conduct a thorough, fair, and transparent review to determine whether uranium imports threaten to impair the national security.”

Tariffs on uranium would potentially raise prices for nuclear power plants at a time when many are struggling to turn a profit. The problem is particularly acute in the parts of the country with unregulated power markets, where they face tough competition from cheap natural gas and renewable energy.

Uranium is also used by the military to power the Navy's fleet of nuclear submarines. It is also used in armor plating and armor-piercing projectiles.

Commerce said its investigation will examine the entire uranium sector, including mining, enrichment, defense and uses by industry. The department consulted with industry stakeholders, members of Congress and the departments of Defense and Energy prior to launching the probe.

Energy Fuels and Ur-Energy submitted their request to Commerce in January, arguing that imports of subsidized uranium from state-owned companies threatens to undermine national security.

"Despite uranium’s critical role in supporting clean electricity and national defense, imports of cheap, foreign state-subsidized uranium have swelled in recent years to the point that domestic suppliers currently provide less than 5% of our nation’s demand," the companies said in a statement.

The companies recommend setting a quota that would limit uranium imports and assure U.S. producers provide about 25 percent of the nation's supply. It is not certain Commerce would follow that recommendation.

Last year, U.S. uranium concentrate production fell to its lowest level since 2004. The nation produced 2.44 million pounds, down from 43.7 million pounds in 1980, when output peaked, according to the U.S. Energy Information Administration.

Only 7 percent of the uranium delivered to U.S. nuclear power plants last year was produced in the United States. Nuclear power generated 20 percent of the nation's energy in 2017.

Canada, Kazakhstan, Australia and Russia shipped most of the uranium used in power plants in 2016.

Concerns are growing that the Trump administration's use of tariffs and the several trade disputes it has opened with allies and rivals alike will crimp global economic growth.

On Tuesday, influential Republican Sen. Orrin Hatch said he may support legislation to limit President Donald Trump 's authority over trade issues if he continues to impose tariffs.