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Once again, China and Indonesia are under investigation by the U.S. International Trade Commission (ITC) because of accusations of “dumping” coated paper products in the United States at prices that are not only below market rates, but are even below what it would cost to produce the paper here.
Filing the petition are NewPage Corp., based in Miamisburg, Ohio; Appleton Coated LLC, in Kimberly, Wis.; Sappi Fine Papers North America, Boston; and the U.S. Steelworkers Union (USW), representing many of the employees (and former employees) in the paper industry. The petition includes a request for a countervailing duty, or a tariff, on these imports.
NewPage, Appleton, Sappi and USW filed their petition to the ITC in September; hearings on the matter were held on Oct. 14, and the ITC’s preliminary decision is expected Nov. 6. The whole process, whether or not it results in tariffs on coated papers, will take about one year to complete.
In addition, the complaints are very specific, naming only coated papers of 80 brightness or higher used for printing and writing in the United States. And the fact that the labor union has joined in the filing only strengthens the argument that these paper imports are damaging domestic producers.
Second Time Around
A similar charge of dumping was brought against China, Indonesia, and North Korea two years ago. In that case, the ITC agreed that China and Indonesia had an unfair advantage in the market because of their governments’ subsidization of their industries among other causes.
However, tariffs are levied only if and when a complaining company or industry can show that the imports have caused material damage to the domestic industry. In the earlier case, printers and even the The American Forest & Paper Association (AF&PA), the national trade association of the forest, pulp, paper, paperboard, and wood products industry, argued against tariffs, and the tariffs were dropped.
The concern is that if the United States puts a tariff on Chinese and Indonesian products, those nations will retaliate with tariffs on products the U.S. exports to their countries.