U.S. Newsprint Duties Imposed

CBJ — As if the newspaper industry hasn’t already been rocked by the sweeping changes in a new digital era and now comes word that 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 more than 6.5% 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 just over 4.4% while the Catalyst Paper duty is slightly above 6%, Kruger’s is 9.9% and the White Birch duty is 0.65%.

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.

The U.S. Department of Commerce says Canada exported about $1.6 billion worth of newsprint to the U.S. in 2016.The new duties comes as Canada and the U.S. continue to try to negotiate a trade settlement on softwood to replace the deal which expired in 2015. Canada is also seeking relief from the softwood duties in appeals through the North American Free Trade Agreement and the World Trade Organization.

@CanBizJournal

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