A long simmering trade dispute between the U.S. and Canada has the possibility of significantly raising the cost of uncoated groundwood paper which is used by book publishers as well as newspaper and directory publishers.
The issue began when the paper supplier NORPAC, the North Pacific Paper Company, asked the Department of Commerce and the International Trade Commission to investigate its belief that the price of uncoated groundwood is being subsidized by the Canadian government and/or being dumped in the U.S. at reduced prices. NORPAC is asking the government to impose duties that could boost the cost of uncoated groundwood by 50%.
The proposal is fiercely opposed by a range of printers, publishers, and paper suppliers who maintain the tariffs would raise the cost of paper so much that it would further endanger the ability of financially fragile newspapers to survive and also further squeeze margins for book publishers.
To oppose the potential imposition of tariffs, a group printers, publishers, and paper suppliers have formed the STOPP Coalition, (Stop Tariffs on Print and Publishers). Members include the Printing Industries Association, Local Search Association, the News Media Alliance and Book Manufacturers's Institute. On February 14, the Association of American Publishers also joined the coalition. A meeting is set for February 22 with the Department of Commerce to discuss the issue.
The ITC has already made a preliminary determination that there was a “reasonable indication” of injury or threat of injury and on January 9, its preliminary determination suggested raising duties on uncoated groundwood imports from Canada 4.4% to 9.9%.
NORPAC has argued that the lower price of Canadian uncoated groundwood has been the main reason why paper producers in the U.S. have been struggling financially. The STOPP Coalition, however says it is the shift toward digital platforms, particularly for newspapers, that is at the root cause for a cut in demand for U.S. uncoated groundwood. As the BMI noted in a release, printers and publishers cannot absorb any increased costs on paper, something that would almost certainly happen if any duties were imposed.
“We believe that, if the U.S. imposes tariffs that raise the price of Canadian [uncoated groundwood] paper imports, U.S. producers of the like domestic paper product can be expected to raise their own prices as well," said Allan Adler, general counsel and executive v-p of the AAP.
The Commerce Department is expected to release its decision on anti-dumping duties on March 9.