Trade war spills into uranium as U.S. weighs import tariffs

(Bloomberg) — The Trump administration began an investigation into whether uranium imports threaten national security, a move that may lead to tariffs on the nuclear power plant fuel.

The Commerce Department said Wednesday it will probe “whether the present quantity and circumstances of uranium ore and product imports into the U.S. threaten to impair the national security.” The probe will cover the entire uranium sector, from the mining industry to enrichment, defense and industrial consumption, the department said.

Imposing uranium duties would deal another blow to nuclear power plants already struggling with low electricity prices and flat demand.

The investigation also adds to trade tensions that the International Monetary Fund warns represents the biggest risk to the global economy. U.S. uranium miners supply less than 5 percent of domestic consumption for the metal and say it’s increasingly difficult to compete with state-subsidized companies abroad.

The Department of Defense will be consulted about national defense requirements for uranium, Commerce Secretary Wilbur Ross said in a separate letter to Defense Secretary James Mattis notifying him of the investigation.

U.S. production of uranium necessary for military and electric power has dropped to 5 percent of domestic consumption, from 49 percent, said Ross. Prices for the commodity have slumped since the 2011 Fukushima disaster led big buyers including Japan and Germany to shut down or decommission reactors. Compounding the problem was a global supply glut that prompted Kazakhstan, the world’s biggest producer, to cut back last year. Canada’s Cameco Corp., the top North American supplier, followed suit in November.

January petition

U.S. uranium producers Energy Fuels Inc. and Ur-Energy Inc. filed a petition in January asking the Commerce Department to investigate the matter under Section 232 of the 1962 Trade Expansion Act, the same provision the president used to slap tariffs on steel and aluminum imports.

Canada and Kazakhstan are the main sources of U.S. uranium imports, each accounting for about a quarter of the total, followed by Australia, Russia and Uzbekistan, according to the U.S. Energy Information Administration. Almost 90 percent of uranium delivered to U.S. reactors was from foreign nations in 2016, according to the government agency.

(By Andrew Mayeda and Jim Efstathiou Jr)