Commerce Secretary Wilbur Ross announced this week that his office is considering tariffs on imports of uranium to go along with the other products that have been taxed in the name of "national security."
The misguided idea is that imposing tariffs on foreign imports will increase domestic production, but that hasn't been the result of Trump's tariffs on steel and aluminum and it probably won't be the result of possible tariffs on uranium.
Investment banks and analysts who spoke to Bloomberg say a tariff on uranium will do nothing to reverse our trade deficit because we simply consume too much uranium.
The investigation is likely to be neutral for the uranium spot price as “the global uranium trade balance is unlikely to shift in a major way, and the spot price is therefore unlikely to move much,” a Berenberg research team wrote. The U.S. accounts for 29 percent of worldwide demand for uranium, but domestic miners supply only 1.8 percent of the global supply. This creates a huge gap for these miners to fill and who will be looking at a premium price point in order to sustain their business, the team added.
In other words, domestic production will never meet our demands and the trade deficit will remain. Imposing a tariff will ultimately raise prices for no substantiated reason.
Analysts also say a tariff on foreign uranium will increase the value of domestic uranium mining companies, but that seems obvious. Trump's tariffs on steel and aluminum also increased the value of those industries, but only for a short period of time before they fell back down to the ground and began declining in value.
Trump and the GOP's refusal to pass a meaningful infrastructure bill means there's simply no demand to support increased production even if Trump's tariffs would make production more lucrative.
There's no one to sell it to at a volume that would make any difference.
We're talking about uranium and simple metals here, but this could apply to virtually anything. We have trade deficits because Americans consume far more than we produce. It's really that simple. We owe a great deal of our current standard of living to the availability of imports.