The implementation of new tariffs on uranium appears improbable despite the initiation of an investigation of possible trade restrictions under Section 232 (see 1807180029), said Kristoffer Inton, a stock research analyst with Morningstar. "We think it’s unlikely a tariff will be enacted, as we see little merit in the arguments laid out by Energy Fuels and Ur-Energy," he said in a research report on Canadian uranium company Cameco. "First, the key reason production from Kazakhstan has grown so much over the last decade is because it simply is home to low-cost uranium deposits," Inton said. "Roughly 12% of global reserves are found in Kazakhstan, second only to Australia." Also, "national security concerns seem unfounded given that the global uranium market is in oversupply and given that the two companies filing the petition claim that they can scale-up production quickly, if needed," he said. "Additionally, uranium could come from underfeeding, re-enrichment, or from Japan’s built-up inventory until mines expand production. This would seem to minimize concerns about a potential uranium shortage in the U.S."
Goods under the $800 de minimis level are not subject to Section 232 tariffs, a CBP spokesperson said July 18. CBP previously said that tariffs don't apply to de minimis shipments covered under the Section 301 tariffs (see 1807050033). The agency recently ruled against the use of foreign-trade zones to get around limits on de minimis entries (see 1807180022).
Lawmakers, farmers and agriculture trade groups voiced worries about the effect of tariffs on rural communities during a July 18 House Ways and Means Trade Subcommittee hearing. "Most of our agriculture producers today rely heavily on export markets, and unfortunately, many of these farmers and producers are now facing the loss of not just one of their top international export markets, but their top 2, 3 and 4 export markets -- all at once," Chairman Dave Reichert, R-Wash., said in an opening statement. "They are facing severe and devastating uncertainty -- and that goes right to their profitability." In response to recent sections 232 and 301 tariffs, "U.S. agriculture is now facing retaliatory tariffs from the EU, China, Mexico, Canada, Turkey, Russia and India," he said. "Now, I know that the administration did not intend for U.S. agriculture to be hurt, but the damage is entirely predictable."
CBP issued the following releases on commercial trade and related matters:
The auto industry is launching a media blitz this week with TV and print ads, and a "drive-in" press event of American workers from German, Japanese and other foreign-owned auto plants. The TV ad, paid for by the Association of Global Automakers, uses the kind of imagery often used in political ads -- a barn in a field of grain -- and a deep-voiced narrator noting that foreign automakers have plants in Indiana, Kentucky, Alabama, Georgia, Tennessee, Mississippi and Ohio. Every one of those states voted for Trump in 2016.
The Commerce Department on July 18 announced a Section 232 investigation into possible import restrictions on uranium. Requested by Ur-Energy USA and Energy Fuels Resources in January (see 1801190016), the investigation will determine whether “the present quantity and circumstances of uranium ore and product imports into the United States threaten to impair national security,” Commerce said.
Senate Finance Committee Chairman Orrin Hatch, R-Utah, called the White House's approach to tariffs "misguided and reckless," and said if the Trump administration "continues forward" with tariffs as a way to protect U.S. manufacturing, "I will work to advance trade legislation to curtail presidential trade authority." He said during a speech on the Senate floor July 17 that he is sympathetic to the effort (see 1807120023) from Sen. Bob Corker, R-Tenn., to rescind steel and aluminum tariffs and prevent tariffs on autos and auto parts, and he is discussing legislative options with his colleagues.
The retaliatory tariffs from the European Union, China, Canada, Mexico and Turkey in response to U.S. steel and aluminum tariffs are being challenged at the World Trade Organization by the Office of the U.S. Trade Representative. "The U.S. steel and aluminum duties imposed by President Trump earlier this year are justified under international agreements the United States and its trading partners have approved," the USTR said in a July 16 news release. "However, retaliatory duties on U.S. exports imposed by China, the EU, Canada, Mexico and Turkey are completely without justification under international rules.
Over a two-day review at the World Trade Organization on China's trade policies, China insisted that intellectual property violations are no longer a major issue; that its support of state-owned enterprises is no different from Fannie Mae; and that its overcapacity in steel is not a problem for global steel prices, because China only exports 9 percent of its steel. Moreover, China's Commerce Vice Minister Wang Shouwen said, addressing overcapacity needs collective actions and China stands ready to join hands with other countries to tackle this problem together.
Sen. Rob Portman will become the latest Republican to try to address the way the administration has wielded Section 232 tariffs, quotas and threats of tariffs. Portman, who represents Ohio and is a former U.S. trade representative, is working on a bill that would change the statute that currently allows the president to take action on whether imports imperil national security while recognizing "the close relation of the economic welfare of the Nation to our national security." The law says that substantial unemployment, loss of skills or investment and declining tax revenues should be considered "in determining whether such weakening of our internal economy may impair the national security."