On Wednesday, July 18, the Department of Commerce announced that it would begin investigating the effects of uranium imports on the national security interests of the United States. The investigation will be conducted under Section 232 of the Trade Expansion Act of 1962. Two U.S. uranium producers – Ur-Energy and Energy Fuels Resources Inc. – petitioned Commerce in January 2018 to open the investigation.
According to the petitioners, a domestic supply of uranium is essential to national defense, as uranium is critical to military applications and a significant portion of electricity for the U.S. power grid. Petitioners assert that they have struggled financially to compete with uranium imports from countries like Russia, Kazakhstan, Uzbekistan, and China that have targeted the U.S. market. The petition states that imports have grown dramatically to capture almost 80% of domestic uranium demand, while U.S. producers have been forced to idle production and lay off workers. Petitioners note that six U.S. nuclear reactors – required to enrich uranium for defense purposes – have closed since 2013 and another eight are scheduled to close between 2018 and 2025. In a statement made regarding initiation of the investigation, Secretary of Commerce Wilbur Ross cited the fact that “U.S. uranium production had been 49 percent of U.S. requirements in 1987. Today, U.S. uranium production has dropped to only five percent of U.S. requirements.”
Commerce has 270 days to submit a report to President Trump as to whether uranium imports threaten to impair U.S. national security. If Commerce reaches an affirmative conclusion, the president is authorized to take actions deemed “necessary to adjust the imports of such article” to address the harm, including by imposing tariffs or other import restrictions, or through indirect action such as domestic industry assistance. The two petitioning companies have called for a quota on uranium imports that would reserve 25% of the U.S. nuclear market for domestic production, and domestic procurement rules that would require the government to purchase U.S.-sourced uranium.
In 1989, Commerce conducted a Section 232 investigation into uranium imports at the request of the Secretary of Energy, but concluded that imports did not pose a risk to national security and no action was taken at that time.
Commerce is also currently examining automobiles and automotive parts imports under Section 232, an investigation that was initiated on May 23, 2018 at the request of President Trump. Most recently, in January 2018, Commerce concluded two Section 232 investigations into imports of steel and aluminum, respectively, finding that imports of these products threaten to impair national security. Beginning March 23, 2018, tariffs of 25 percent were imposed on steel and aluminum imports from most countries. The Administration’s use of Section 232 as a broad instrument of trade policy has generated controversy within the United States and with U.S. trading partners. The actions taken on steel and aluminum imports under Section 232 have led to law suits, challenges by other countries at the World Trade Organization, and retaliatory tariffs against U.S. exports.