Tariff decision on Canadian newsprint adds to worries for American newspapers
Jan 13 2018 by Desiree Burns
Canada has launched a wide-ranging attack against US trade practices in a broad global complaint over American use of punitive duties.
US Commerce Secretary Wilbur Ross said the preliminary decision "allows US producers to receive relief from the market-distorting effects of potential government subsidies while taking into account the need to keep groundwood paper prices affordable for domestic consumers".
Duties have already come down on Canadian softwood lumber and Bombardier subsidies.
Catalyst does have other export options to mitigate the impact, said industry analyst Kevin Mason with the firm ERA Forest Products Research, but argued the trade action is a self-serving move that will only hurt US newsprint consumers in the long run.
In the longer term, however, Mason forecasts that the industry will face tough times due to dropping demand that will likely be sped along by higher prices for its customers, largely struggling US newspaper publishers.
A U.S. Commerce Department decision to impose tariffs on Canadian paper imports is stoking concerns at American newspapers about financial strains facing the news industry.
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Ross and his department should listen to the overtures of The News Media Alliance, National Newspaper Association and a bipartisan coalition of congressional members who oppose the duties on Canadian paper used to publish American newspapers. "This decision will protect American jobs in Washington, Mississippi and Georgia, and may even serve to create jobs in the U.S.as idled paper machines restart", Norpac chief executive officer Craig Anneberg said in a statement Tuesday night. Connecticut-based White Birch Paper Co., which runs three Quebec paper mills through its Canadian unit, is the voluntary respondent in both the countervailing and anti-dumping cases.
Given its "outlier status", the letter said, "it appears that One Rock Capital Partners may be using the petitions as a means of increasing the short-term value of this one mill, without any regard for the dramatic negative implications for US newspapers in thousands of small cities and towns".
Neuheimer said about 5,000 jobs across Canada are directly linked to the newsprint business, and unlike softwood, where the industry had high prices to help offset the hurt of the USA duties, newsprint margins are already so low that the impact of this is going to be felt immediately. The Daily News is printed on paper manufactured at Norpac. If Commerce makes an affirmative final determination and the U.S. International Trade Commission (ITC) makes an affirmative final injury determination, Commerce will issue a CVD order. Ltd., Canfor Corp. and Tolko Industries Ltd.
The Commerce Department preliminarily determined that exporters from Canada received countervailable subsidies ranging from 4.42 to 9.93 percent. All other Canadian producers weighted an average of 6.53 per cent.
The tariff is as high as 9.93 per cent for Kruger Inc., which is based in Quebec.