The uranium front of Trump's trade war Presented by Semiconductor Industry Association

With help from Jakob Hanke and Hans von der Burchard

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— President Donald Trump and his administration could soon open up a new front in the trade war that could once again raise tensions with allies and drive a wedge between the White House and Congress. This time, the focus is on uranium.

— Pro-trade groups are ramping up their pressure on members of Congress this week, imploring lawmakers to consider the fallout of current and future tariffs. The groups want them to use their leverage to pressure the administration to back down.

— House Democrats whose stance on the U.S.-Mexico-Canada Agreement will prove crucial to its passage are focused on strong enforcement. That alone will likely not be enough to win their votes, a prominent pro-trade Democrat says.

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IT'S MONDAY, FEB. 4! Welcome to Morning Trade, where your host is very here for pro-journalism Super Bowl ads. Any other nominees for best commercials from last night? Let me know: [email protected] or @mmcassella.

THE URANIUM FRONT ON TRUMP’S TRADE WAR: Amid trade talks with China, fallout from steel and aluminum duties, and fears of new auto tariffs, other actions of the Trump administration’s trade strategy has fallen somewhat under the radar. One that may soon be in the news is whether to restrict uranium imports for national security reasons.

The Commerce Department formally began an investigation in July examining whether foreign imports of uranium threaten U.S. national security.

The probe, like those the administration has already completed into steel and aluminum imports, could lead to tariffs or import quotas. It could also soon become the next wedge issue straining ties with U.S. allies and between the administration and Congress.

The mandate: Trump could decide to impose an import quota in the coming months to ensure domestic uranium mining firms supply 25 percent of the U.S. market. That would force domestic companies to expand capacity exponentially: They supplied only 5.4 percent capacity in 2017.

Commerce is scheduled to make its recommendation on April 14, though the shutdown may have delayed that deadline.

The pushback: Trading nations and domestic organizations are pressing the administration not to impose any sort of restrictions, with many arguing that there is no national security basis for tariffs or quotas.

The Nuclear Energy Institute, the main industry group for nuclear power generation, says imposing a 25 percent quota for domestic suppliers could raise costs so much that it could force some of the nearly 100 nuclear power plants out of business.

Trading partners like the EU also urged the administration generally to stop invoking its Section 232 authority for what it considers disguised protectionism. Doug Palmer has the full story this morning here.

TAMPING DOWN THE TRADE WAR: Hundreds of manufacturers, farmers and business representatives are heading to Capitol Hill later this week to pressure President Donald Trump and his administration to end the trade war, rather than ratchet it up.

This week’s fly-in will feature more than 100 businesses and farmers from across the country who will be calling for congressional oversight hearings on the harm tariffs have imposed. They are also out in force to stop legislation spearheaded by Rep. Sean Duffy (R-Wis.) that would expand executive authority over tariffs.

Timing is everything: The fly-in comes less than a month before the administration’s deadline to either wrap up talks with China or ramp up tariffs even further. And it’s also aimed at emphasizing how additional duties will multiply the harm that farmers and manufacturers are already facing in the brunt of international trade tensions.

A numbers game: The advocacy effort, which is being organized by the group Tariffs Hurt the Heartland, will include the release of a new study examining how different tariff scenarios will hurt jobs, American families and the broader economy. That release is scheduled for Wednesday.

LARSEN: ENFORCEMENT JUST ONE ASPECT OF THE USMCA DEBATE: Congressional Democrats have made clear that strong enforcement mechanisms are going to be key to their support for the new NAFTA agreement, but that alone is likely not going to be enough to win their votes, a prominent House Democrat says.

Rep. Rick Larsen (D-Wash.), a pro-trade Democrat and co-founder of the China Working Group, says on a new Brookings Institution podcast that while there are “a lot of cats and dogs on this thing” that members are examining, the “key topics” will be environment, labor, rules of origin and enforcement.

“And, as a result, will be the areas where the Democratic leadership in looking at implementing legislation will maybe try to shape how the bill is implemented to make it a comfortable vote for members of Congress,” he said.

But it’s more than enforcement. “It’s hard to make this case that if we just take care of enforcement issues then members of Congress will be satisfied,” Larsen said on the Dollar & Sense podcast. “But it’s one of those necessary but maybe not sufficient elements of the bill.” Listen here.

CAP ANALYSIS: USMCA DOESN’T GO FAR ENOUGH: As Democrats delve into the details of the deal, a leading progressive policy group is arguing that the agreement does not go far enough to help American families or to level the playing field. The Center for American Progress says compared to the original NAFTA, “workers will scarcely fare better” under the new deal.

“Just because Trump said he would ‘rip up’ all of our existing trade agreements does not necessarily mean that the new ones are any better,” said Marc Jarsulic, a co-author of the report. Read it here.

A STEP FORWARD FOR EU-U.S. TALKS: Parliamentarians in the European Commission’s trade committee will this afternoon debate recommendations for the opening of trade negotiations the EU and the U.S.

Rapporteur Bernd Lange will present his views on those trade talks and members will debate a motion for a joint resolution. Lange has been openly skeptical of trade talks with Trump, pointing out that the EU would be giving up many of its principles — such as the rule that Europe only strikes trade agreements with countries that promised to ratify the Paris climate agreement.

CONGRESS’ TOMATO FIGHT: A bipartisan group of lawmakers is urging Commerce Secretary Wilbur Ross to immediately end a tomato suspension agreement between the U.S. and Mexico, which halted the U.S.’s anti-dumping probe of fresh Mexican tomatoes.

In a letter sent to Ross on Friday, nearly 50 members of the House and Senate called on Ross the scrap the current agreement, restarting the U.S. anti-dumping investigation, and then renegotiate a new deal that would provide more favorable terms for American producers. Read it here.

A push for Florida ag: Florida lawmakers make up more than half of the 46 signatories on the letter to Ross, reflecting the importance the state’s delegation has put on protecting its tomato growers. Many of those Floridians are also pushing legislation, called the Defending Domestic Produce Production Act, that would seek to protect the state’s agricultural producers by cracking down on what they see as unfair dumping of ag products in the U.S. from Mexico.

Rep. Vern Buchanan (R-Fla.), a co-sponsor of the bill and the top Republican on the House Ways and Means’ Trade Subcommittee, penned an op-ed in the Bradenton Herald over the weekend defending the effort as a “necessary step” to more easily combat Mexico’s unfair and illegal trade practices.” Read it here.

BREXIT CORNER: U.K.’S FOX REJECTS WTO-ONLY OPTION: British Trade Secretary Liam Fox said Sunday that crashing out of the EU without a deal and having to rely on World Trade Organization rules would be "survivable," but "it wouldn't be in our best interest to do that."

In an interview with Sky News' Ridge on Sunday, Fox said: “If WTO was so good, people wouldn’t be looking to have trade agreements or customs unions."

Be consistent: "It seems to me a bit strange that people would say, 'Well, we don't need to worry about having a future trade deal with Europe, we can operate on WTO terms,' while at the same time saying 'We should have a free trade agreement with the United States to get away from WTO rules,'" Fox said. "So, we have to be consistent."

What no deal really means in trade terms: David Henig, U.K. director at the ECIPE think tank, has written a Twitter thread summing up many of the dire consequences that Britain would face if it crashed out of the EU without a deal — from a 42-percent tariff on cheese exports to Europe to difficult choices on lowering Britain's own tariffs.

— China’s holding of U.S. Treasuries fell to their lowest levels in more than a year and a half amid trade tensions, Bloomberg reports.

— The U.S.-China trade tensions are affecting the relationship between Beijing and Silicon Valley, VOA reports.

— Beijing bought at least 1 million tonnes of U.S. soybeans on Friday, a day after trade talks ended, Reuters reports.

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