Trump Got It Right on Uranium Imports


Trump Got It Right on Uranium Imports

Jul 16, 2019 2 min read

Former Research Fellow

Katie Tubb was a research fellow for energy and environmental issues at The Heritage Foundation.
The president’s decision upholds free trade and rejects the protectionist policies that have failed Americans and alienated allies. Tasos Katopodis / Stringer / Getty Images

President Donald Trump should be commended for separating fact from fiction in his decision late Friday not to employ trade barriers on uranium imports. 

At issue was a year-and-a-half-long investigation into uranium imports brought to the Department of Commerce by two small uranium mining companies. The petitioners argued that uranium imports—which make up 93% of the uranium used by commercial nuclear power plants in the U.S.—presented a national security threat.  

Misinformation unfortunately played a role in the debate. For example, petitioners arguing for quotas claimed we have “essentially surrendered the entire fuel cycle to China and Russia.” But that simply isn’t the case. 

Nuclear energy companies in the U.S. didn’t import uranium from China in 2018. Instead, they imported from a variety of countries in short- and long-term contracts: Canada (24%), Kazakhstan (20%), Australia (18%), Russia (13%), Uzbekistan (6%), and Namibia (5%). 

The reality is that international uranium markets are flooded with inexpensive supply. Domestic licensed mine capacity more than tripled since 2004 in anticipation of growth, but only a handful of mines are actually operating now given market conditions.

The hoped-for increase in uranium demand failed to appear with the “nuclear renaissance” of the early 2000s. The unexpected downturn in global uranium demand following the 2011 Fukushima Daiichi accident in Japan contributed to other factors that depressed demand in America, such as the 2008 financial crisis, flat electricity usage, several nuclear power plant closures, increased fuel and reactor operations efficiencies, and the natural gas fracking boom.

Although plenty of inexpensive sources of uranium is bad news for uranium companies, it’s good news for the nuclear power industry. 

The civilian nuclear industry today is international in scope, and trade is essential for U.S. nuclear companies to remain competitive. If the American nuclear industry is to be competitive, it needs the freedom to shop for the best components available, including uranium. 

The president’s decision upholds free trade and rejects the protectionist policies that have failed Americans and alienated allies.

What then to make of the national security angle? It’s telling that some in the mining industry premised trade barriers on national security, but the Pentagon did not. 

Trump was right to put a wider lens on the issue than the self-interested one requested by the petitioners that looked solely at uranium mining or what’s believed to have been studied by the Department of Commerce in its confidential report to the president. Instead, Trump commissioned a working group to examine “the entire fuel supply chain, consistent with United States national security and nonproliferation goals.”  

Further down the road, there are indeed specific defense requirements that must be met concerning supply, conversion, and enrichment capabilities to meet defense needs. But the federal taxpayer—not a tangentially related industry—should shoulder that burden as part of providing for the common defense. 

Indeed, Congress has created tools to that end, such as the Defense Production Act, and could further fine tune this in the annual defense funding legislation now working its way through Capitol Hill.  

Tariffs may have given the impression of helping the uranium-mining industry, but the history of damage done by earlier protectionist policies and anti-competitive policies cannot be ignored. 

Instead, the Trump administration struck the right approach by preserving access to competition and international markets and correctly framing national security.

This piece originally appeared in The Daily Signal