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Sat, Apr 20, 2019 22:43
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Management Side
Trump's trade war hurting B.C. pulp mills, U.S. newspapers

RICHMOND, B.C. (From news reports) -- The U.S. government's latest trade attack on the B.C. forest industry is not only threatening jobs in B.C.'s pulp and paper business, it's pushing struggling U.S. newspapers to make further cuts.

B.C.-based Catalyst Paper is moving away from supplying U.S. newspapers and other customers due to continued border duties imposed at the request of a single pulp mill competitor in Washington state. The punitive duties, like those on B.C. lumber, have had their greatest impact on U.S. consumers of the product, as is the case with the latest U.S. border duties on softwood lumber that drive up costs for American builders.

David Chavern, CEO of the U.S. News Media Alliance, said the latest decision by the U.S. to continue duties of more than 20 per cent on B.C. newsprint and other uncoated paper is hurting the newspapers he represents. He notes that the International Trade Commission (ITC) can still reverse the duties in a vote expected Aug. 29.

"There is strong evidence before the ITC that it is the decades-long shift from print to digital - not pricing from Canada - that has financially challenged the U.S. newsprint industry," Chavern said in a statement after the "final decision" to continue duties on all Canadian newsprint and book paper imports. "These taxes will simply force newspapers and printers to cut their use of newsprint, harming the U.S. paper industry the tariffs are intended to protect."

That has already happened since the preliminary duties took effect in January. The Tampa Bay Times pointed to higher newsprint costs when it laid off 50 employees in April and the Salt Lake Tribune also cited the Canadian duties in its latest layoffs.

According to the U.S. Bureau of Labour Statistics, half of the jobs in the American news industry have gone between 2001 and 2016, while employment in internet publishing and web search portals has more than tripled.

Small local newspapers in the U.S. have felt the worst effects, National Newspaper Association president Andrew Johnson told the New York Times.

The U.S Commerce Department issued its final ruling on uncoated paper imports from Canada last week, lowering its preliminary anti-dumping and countervailing duties from more than 28 per cent to a combined 20.16 per cent. The action applies across Canada, including Catalyst operations at Crofton near Duncan and Powell River.

"While our mills have provided newsprint to the U.S. for more than 100 years, we're now changing our customer base to minimize the impact of these duties because of one U.S. mill," said Ned Dwyer, president of Catalyst. "This isn't sustainable over the long term."

Washington-based North Pacific Paper Co. launched the original trade complaint last year, without backing from any other U.S. pulp producer and over the objections of U.S. newspapers. U.S. paper makers have shifted their business away from newspaper supply in response to the long-term trend of the industry to print and distribute fewer paper copies.

U.S. Commerce Secretary Wilbur Ross described the complaint by North Pacific Paper Co., owned by a New York hedge fund, as "a complicated and unique case." The ruling also imposes duties on producers in Quebec and elsewhere in Canada as well, but at lower rate than B.C.

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