Newsprint duties put thousands of jobs ‘at risk’

U.S. slaps 6.53% tariff on 25 Canadian plants

MONTREAL • The American government’s imposition of duties on exports of Canadian newsprint will only accelerate the transition from print to digital and threaten thousands of U.S. jobs, says North America’s largest newsprint producer.

“There are 600,000 workers in the newspaper publishing sector as well as the commercial printing sector who are at risk,” said Resolute Forest Products spokesman Seth Kursman.

“And we know as a manufacturer of this product that if demand continues to go down over time this has an impact on our ability to operate facilities.”

The U.S. Department of Commerce slapped an overall preliminary countervailing tariff of 6.53 per cent on about 25 Canadian plants, mostly in Quebec and Ontario, following an investigation that began in August 2017.

Canada is the world’s largest exporter of newsprint, with a market dominated by Resolute Forest Products, Kruger and Catalyst Paper Corp. of British Columbia.

Resolute faces a preliminary duty of 4.42 per cent while the Catalyst Paper duty is 6.09 per cent. The duty against Kruger is 9.93 per cent and the preliminary penalty against White Birch is 0.65 per cent.

It’s the third time the U.S. has slapped duties on Resolute. The Montreal-based company expects to pay a total of US$190 million in duties by the end of 2018 over softwood lumber, supercalendered paper and newsprint.

“Today’s preliminary decision allows U.S. 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,” stated U.S. Commerce Secretary Wilbur Ross.

The U.S. Department of Commerce will make another decision on anti-dumping duties in March and the U.S. International Trade Commission will be asked to rule on the two measures in August.

The U.S. government began investigating Canada’s newsprint industry after Washington-based North Pacific Paper Co., complained Canada was dumping newsprint into the American market and unfairly subsidizing its industry at home.

It is the same argument made regarding Canada’s softwood industry, which led to the imposition of both countervailing and antidumping duties on most Canadian softwood exports to the United States.

“What the U.S. uncoated groundwood papers industry wants is a level playing field, and this decision is an important step forward for American producers, workers and their families that have been the victims of unfair Canadian trade practices for too long,” stated Norpac chief executive Craig Anneberg.

The company estimates the ruling will raise production costs by less than five cents per newspaper.

Anneberg said that’s a “small price to pay to preserve American manufacturing jobs” in Washington, Mississippi and Georgia.

However, Kursman said Norpac is referring to three states where Resolute operates paper mills. By contrast, Norpac has just one mill and is owned by a New York private equity firm.

“Now they are perversely manipulating trade law in an effort to satisfy their own personal greed. This is about lining their own pockets with cash at the expense of hundreds of thousands of American jobs.”

Kursman said Norpac was alone in its challenge because production margins are “razor thin.”