First Solar, Then Steel -- Is Trump's Next Trade Target Nuclear?
(Bloomberg) -- On Thursday, as President Donald Trump ordered tariffs on Chinese goods, he warned, “This is the first of many.”
Well, if he’s serious, here’s another potential trade target: uranium. In January, the administration imposed tariffs on solar equipment being shipped into the U.S. A little over a month later, Trump announced taxes on steel and aluminum imports. U.S. uranium companies are fighting for similar relief as America’s nuclear power generators increasingly turn to supplies overseas to fuel their plants.
The uranium suppliers are invoking the same section of the Trade Expansion Act that the Trump administration used to slap tariffs on steel and aluminum imports. If they’re successful, America’s nuclear power generators could face higher costs for uranium imports that account for almost 90 percent of their total supplies.
“The uranium issue is certainly something that would appeal to the Trump administration,” said Bryan Riley, director of the National Taxpayers Union’s Free Trade Initiative in Washington. “Their willingness to impose restrictions on steel and aluminum based on national security allegations that were thin at best would lead me to think they are looking for other industries making similar claims.”
A trade group for the U.S. nuclear industry fired back on Thursday, warning that utilities are already struggling to deal with “depressed” power markets, competition from cheap natural gas and the onslaught of renewable energy. “The potential remedies of the petition may put even more units at risk for premature closure,” the Nuclear Energy Institute said by email.
Meanwhile, a trade war with China already poses a threat to uranium supplies, said Dan McGroarty, founder of rare-earth minerals consultancy Carmot Strategic Group. “I’m kind of worried about that if it would hit uranium.” China has already announced plans to hit back with reciprocal tariffs on $3 billion of imports from the U.S., including products from steel to pork.
To be sure, Trump may decide to steer clear of the uranium debate. The uranium sector doesn’t employ a ton of people, and Wyoming -- where much of fuel is domestically produced -- already supports Trump, said Kevin Book, managing director at the research and analysis firm Clearview Energy Partners LLC in Washington.
The Commerce Department said Thursday that its Bureau of Industry and Security is still reviewing the petition from uranium producers. The White House has meanwhile already proposed increasing the department’s budget, in part to support the enforcement of “fair and secure trade.”
©2018 Bloomberg L.P.