Imported Canadian Newsprint Tariffs Are Reduced, But Not Eliminated, by Department of Commerce

The U.S. Department of Commerce's final determination slightly lowered the maximum tariffs that can be imposed on imported uncoated groundwood paper. | Credit: iStock

The U.S. Department of Commerce made a final determination yesterday to proceed with the anti-dumping and countervailing newsprint tariffs it had initially imposed on uncoated groundwood papers imported from Canada, despite strong opposition from Congressional members on both sides of the aisles, various newspaper printing and publishing advocacy groups, industry associations, printing companies and even several U.S.-based newsprint manufacturers. The ruling was a partial victory for newspaper, book, catalog and insert publishers and printers, however, in that the border taxes - which ranged from 4.4% to 32% - were decreased slightly to a maximum 20.26% duty deposits that can be collected at the U.S. border.

Specifically, the Department of Commerce calculated a dumping rate of 16.88% for Catalyst, and 0% dumping rates for Resolute Forest Products and White Birch Paper. Based on the rates calculated for Resolute and White Birch Paper, it then determined a 0% dumping rate for all other Canadian producers and exporters of uncoated groundwood paper.

The agency also calculated countervailing (due to Canadian government subsidies) levies of 3.38% for Catalyst, 9.53% for Kruger, 9.81% for Resolute, 0.82% for White Birch Paper and subsidy rates of 8.54%, on average, for all other Canadian newsprint producers and exporters.

Highest Duties: Canadian Newsprint Paper Manufacturer Catalyst

The most impacted manufacturer - Richmond, British Columbia-based Catalyst Paper - as might be expected, was disappointed with the Commerce Department's dumping investigation of its export practices and subsequent ruling that results in 20.26% duties being imposed on Catalyst's newsprint exports to the United States.

"While not surprised, we’re disappointed with the U.S. Department of Commerce’s decision to keep these unwarranted duties in place, albeit at a lower rate,” said Ned Dwyer, president and CEO. “These duties are punitive and without merit. The allegation that we are subsidized and engage in dumping activities is wrong and does not adhere to the facts.

“This onerous U.S. trade action directly affects the competitiveness of our business,” he added. “While our mills have provided newsprint to the U.S. for more than 100 years, we’re now changing our customer base to minimize the impact of these duties because of one U.S. mill, but this isn’t sustainable over the long-term.”

On the other end of the spectrum, Longview, Wash.-based North Pacific Paper Co. (NORPAC) - the single U.S. newsprint producer to file the complaint - was satisfied with the ruling. "As established by the [Commerce] Department’s final determination, Canadian producers have been engaged in unfair trade practices, which harm American workers and cause material injury to our industry," noted NORPAC CEO Craig Anneberg. "While we are pleased that our allegations of dumping and subsidization have been confirmed, we are disappointed that the Department of Commerce did not impose antidumping duty deposits on companies that were not investigated, instead setting the deposit rate for 'all others' at zero," Anneberg added.

NORPAC is owned by a New York-based hedge fund. It is one of five newsprint paper mills that still remain in the United States. Since 2012, more than 10 paper mills have reportedly closed, eliminating uncoated groundwood paper capacity by nearly 70%.

A coalition called STOPP (Stop Tariffs on Printers and Publishers), which was formed in opposition to the tariffs, argues that the drop in newsprint paper capacity has been driven by a drop in demand, largely due to declining printed newspaper readership rates as a result of digital alternatives - but not by "subsidized" Canadian imported paper. Since 2007, 78 paper machines have been closed or converted, according to the coalition, eliminating more than 10 million metric tons from industry production capacity.

ITC Still Could Rule to Drop the Newsprint Tariffs

Now the case will move to the International Trade Commission (ITC), which is expected to vote on the paper tariffs on Aug. 29 and make its decision public on Sept. 17. It could vote to keep the tariffs in place or overturn them completely.

David Chavern, president and CEO of the New Media Alliance, hopes it's the latter. “These import duties on newsprint have already caused job losses in the printing and publishing sectors and have resulted in decreased news coverage in local communities. Although this is a step in the right direction, the reduced rates only lessen the pace at which the tariffs are harming the industry. We hope that the International Trade Commission will entirely reverse these misguided tariffs at the end of the month.”