Newsprint hit with U.S. duties
Overall tariff of 6.53% applies to about 25 Canadian plants
Newsprint is the latest Canadian product to be hit with preliminary countervailing duties from the United States.
The U.S. Department of Commerce slapped an overall tariff of 6.53 per cent on about 25 Canadian plants, mostly in Quebec and Ontario, following an investigation that began in August 2017.
“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 Secretary Wilbur Ross. “The Department of Commerce will continue to evaluate and verify the accuracy of this preliminary determination while standing up for the American business and worker.”
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.
The U.S. Department of Commerce will make another decision on antidumping 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.
In a joint statement, Foreign Affairs Minister Chrystia Freeland and Natural Resources Minister Jim Carr called the duty rates “unjustified.”
“Any duties will have a direct and negative impact on U.S. newspapers, especially those in small cities and towns, and result in job losses in the American printing sector,” the ministers said in a statement.
“We will continue to work with our forest industry, provinces and territories, and communities across Canada to defend this vital sector against unfair and unwarranted U.S. trade measures and practices.”
Newfoundland and Labrador Premier Dwight Ball said in a statement that he is disappointed with the decision to place a countervailing duty on newsprint from Corner Brook Pulp and Paper, a division of Kruger.
Ball said the provincial government will “explore every opportunity” to advocate on behalf of the company and the forestry industry.
Resolute Forest Products spokesperson Karl Blackburn called the duties “completely unfair and unjustified.”
Denis Lebel, the president and CEO of the Quebec Forest Industry Council, labelled them “absolutely unfounded.”
The U.S. Department of Commerce says Canada exported about $1.6 billion worth of newsprint to the U.S. in 2016.