The Commerce Department said an investigation into possible widespread dumping of uncoated groundwood paper, or newsprint, on the U.S. market by Canada’s top producers has come up short.
The department revised downward its preliminary dumping determination for the investigation from between zero and 22.16 percent to between zero and 16.88 percent, and calculated the dumping rate of 16.88 percent for newsprint producer Catalyst Paper Corp. and zero for Canada’s Resolute Forest Products and White Birch Paper, as well as all other producers and exporters of this product.
However, Commerce calculated in its countervailing duty investigation of this product a subsidy rate of 3.38 percent for Catalyst, 9.53 percent for Kruger, 9.81 percent for Resolute and 0.82 percent for White Birch Paper. The department also determined a subsidy rate of 8.54 percent for Canada’s other producers and exporters of uncoated groundwood paper.
Dumping occurs when a foreign company sells its product on the U.S. market at less than fair value, while countervailable subsidies are given to companies by foreign governments based on their export performance or use of domestic materials over imports in its product manufacturing.
“This was a complicated and unique case. The department worked hard to address the arguments raised, and I am satisfied that the final determinations appropriately targets bad actors,” said Commerce Secretary Wilbur Ross in a statement Thursday. “Today’s decisions are the culmination of an open and transparent process which ensured a full and fair assessment of the specific facts of this case.”
Canada’s Foreign Affairs Minister Chrystia Freeland said, “Despite the slight reduction in some duties, Canada remains disappointed with the final duty rates announced by the U.S. Department of Commerce on U.S. imports of Canadian uncoated groundwood paper.”
Freeland added that the tariffs will have negative impacts on already struggling Canadian paper producers and U.S. printers.
“The tariffs would be particularly hurtful for smaller communities, resulting in higher costs and even job losses at local newspapers and publications,” she said.
Commerce estimated that imports of uncoated groundwood paper from Canada in 2017 were valued at $1.21 billion.
The petitioner for the U.S. antidumping and countervailing duty investigation is North Pacific Paper Co. in Longview, Wash.
The company in its petition noted that since 2012, more than 10 American mills closed and 2,150 jobs were lost. During this time, the company also said U.S. producers’ share of the American market dropped from 60 percent to 36 percent.
“While we understand the concerns recently surfaced by some newspaper publishers, we strongly disagree with the notion that their industry requires low-priced, government-subsidized, imported newsprint from Canada to sustain its business model,” said Craig Anneberg, CEO of North Pacific Paper, in a statement earlier this year.
The U.S. International Trade Commission is scheduled to make its final injury determinations on Sept. 17. Only if both Commerce’s and the ITC’s final determinations are affirmative will antidumping and countervailing orders be issued. If the ITC makes negative final determinations of injury, the investigations will end and no orders will be issued. Companies receiving a zero or de minimis dumping and/or subsidy rate will be excluded from any orders, Commerce said.