U.S. imposes duties on Canadian newsprint shipments

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 spokesperson 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 largest exporter of newsprint in the world, 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 $185 million in duties from trade disputes over softwood lumber and supercalendered paper. The countervailing newsprint duty is expected to result in another $45 million a year in deposits.

“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 anti-dumping duties on most Canadian softwood exports to the United States.