US Hits Canadian Groundwood Paper Imports With Tariffs

Rise against proposed newsprint taxes

NewsAlert: Canada launches global trade complaint vs US over use of duties

Norpac, owned by hedge fund One Rock Capital Partners LLC of NY, said subsidies in Canada include breaks on electricity rates and unfair financial assistance.

In a victory for Norpac - and potential blow to local newspapers - the U.S. Department of Commerce announced Tuesday that it will start imposing preliminary antidumping and countervailing duties on Canadian paper producers.

The company was acquired in late 2016 by One Rock Capital Partners, a New York-based hedge fund.

The United States announced tariffs Wednesday on 25 Canadian newsprint producers including Catalyst Paper Corp. of B.C. If Commerce makes a negative final determination or the ITC makes a negative final determination of injury, the investigation will be terminated and no order will be issued.

The U.S. Department of Commerce has made a decision to impose initial duties of up to 9.93 per cent against Canadian newsprint sold south of the border.

"These tariffs will saddle publishers with additional costs that will ... accelerate the decline in both the printed newspaper and newsprint industries".

"That's a huge increase when you look at the business costs for a newspaper", she said.

The letter didn't include publishers of larger papers, but concerns there are similar.

"It would be very significant economic stress on the company", he said, "but it wouldn't put us under".

"As for our customers, many can barely pay their printing bills now", the letter said.

Norpac is targeting products such as newsprint, directory paper, bookgrade paper and groundwood printing and writing paper. It also accuses the USA of using a trade-panel voting system that's biased against foreigners. But industry officials said that's due primarily to the shift from print to digital media consumption, not to unfair trade practices. After that, the International Trade Commission would take up the matter and conduct hearings to determine whether the preliminary duties would become permanent.

If fully implemented, the resulting hardship could lead to thousands of job losses in the newspaper industry.

Commerce secretary Wilbur Ross said the decision "allows US 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".

It has asked the World Trade Organization to examine the use of duties in the United States, alleging that they violate worldwide law for five reasons.

The move comes in response to a petition filed in August in which the Longview papermaker alleged that Canadian paper manufacturers hold an unfair advantage over domestic producers.

With almost 400 non-union employees, Norpac is one of Cowlitz County's largest employers. A week after filing the petitions in August, the company announced that it would shut down one of its three paper machines in October, resulting in an undetermined number of layoffs and reducing the plant's capacity by almost one-third to 540,000 tons per year.

Latest News