On the heels of the Trump administration imposing controversial tariffs on imported steel and aluminum, the Department of Commerce this week announced the imposition of a 22.16 percent anti-dumping duty on imported Canadian newsprint after affirming its preliminary determination that Canadian manufacturers are “dumping” newsprint into the United States.
According to a Department of Commerce worksheet, dumping occurs when a foreign company sells a product in the United States at less than its fair value.
The antidumping duties are in addition to the countervailing duties on newsprint and other uncoated paper products of 4.4 to 9 percent announced by the Department in January.
As a result of this week’s decision, Commerce has instructed U.S. Customs and Border Protection (CBP) to collect cash deposits from importers of uncoated groundwood paper (the category within which newsprint falls) from Canada based on the new rates.
Paper producers have already announced significant price increases in an attempt to absorb the duties. Additionally, newsprint manufacturers with low rates are being asked for supply and are raising prices because of higher demand.
The News Media Alliance (NMA) and National Newspaper Association (NNA) are leading the opposition effort and CNPA sent letters to each member of California’s Congressional delegation asking them to oppose Commerce’s imposition of the duties. In addition to California’s Congressional delegation, CNPA is also working with Senator Diane Feinstein, who is concerned about the negative impact of these duties on California newspapers, to take action at the appropriate time.
In response to Commerce’s action, NMA CEO David Chavern issued a statement saying, “Most newspapers will not be able to absorb these increased costs and will be forced to reduce page counts, reduce days of distribution, and/or move more information to digital platforms. Some small-market or rural newspapers, with slim margins, will close. Ironically, the supposed beneficiary of duties on Canadian newsprint imports – U.S. newsprint mills – will be harmed as tariffs will artificially decrease the demand for their product.”
NNA President Susan Rowell, publisher of the Lancaster (SC) News said, “We are painfully aware that some newspapers will not survive this upheaval. For those who do, it will be at the expense of a diminished news mission. Our readers, customers and community will pay the price, just so NORPAC, one small mill in Washington state, can use trade laws to a very temporary advantage. Long term, we will all lose.”
The petitioner requesting that Commerce impose the countervailing and antidumping duties is NORPAC, which operates a single mill in Washington State. NORPAC is an outlier that was recently purchased by a New York hedge fund operator, with no additional pulp or paper operations in the United States or globally.
NORPAC’s owners are seeking government protection through trade sanctions. In contrast, the majority of the U.S. newsprint manufacturers, and even the national trade association for the U.S. paper industry – the American Forest and Paper Association – as well as their U.S. customers, oppose this move.
Commerce is scheduled to announce the final determination in its investigation on or about August 2, 2018.
The U.S. International Trade Commission (ITC) will conduct its final investigation in this case later in the spring and is expected to reach a final determination regarding any injury to the domestic industry by September 2018. The investigation will include surveys of newsprint customers, filing of briefs and holding a public hearing. NMA and NNA are helping to coordinate the responsive efforts for the newspaper industry in these proceedings.
If either Commerce or the ITC reverse their preliminary rulings in their final determinations, any collected duties will be refunded to importers.