Rolls of raw paper sit on the floor at the Great Little Box Co. manufacturing facility in Vancouver, British Columbia, Canada. (Photographer: James MacDonald/Bloomberg)

U.S. Scraps Tariffs on Canadian Paper in Win for Publishers

(Bloomberg) -- An independent U.S. federal agency ruled that Canadian paper imports don’t hurt American producers, delivering a surprise decision that eliminates tariffs that had raised prices and squeezed margins at struggling newspapers.

The U.S. International Trade Commission said in a statement Wednesday that its decision ends the yearlong government investigation into allegations that Canada was dumping uncoated groundwood paper into the U.S. and offering its producers unfair subsidies. The paper is commonly used to print newspapers.

“No antidumping or countervailing duty orders will be issued on imports of this product from Canada,” the commission said in the statement.

The ruling comes after the commission last year agreed that American producers were possibly “materially injured” by Canadian imports. The Commerce Department subsequently slapped preliminary duties on the product. The department early this month lowered the rate of its duties, slashing them to zero for two Canadian exporters and trimming them to 16.9 percent from 22.2 percent for a third.

Many U.S. newspapers had complained the tariffs were an added burden amid years of declining revenue, and applauded Wednesday’s decision.

“Today is a great day for American journalism,” David Chavern, president of the News Media Alliance, which represents news organizations, said in an emailed statement. The ruling “will help to preserve the vitality of local newspapers and prevent additional job losses.”

North Pacific Paper Co.’s media-relations contact didn’t immediately respond to a request for comment. The Washington state-based company had initially asked the government to conduct the investigation.

In a related development on Wednesday, the U.S. appealed a panel report from the World Trade Organization that ruled American duties against Canadian glossy paper imports violated international trade rules. If the WTO appellate body upholds the decision on appeal, it could force the U.S. to revise or eliminate its duties on the paper imports.

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