Smithson deciphers Commerce Department’s newsprint tariff decision

By Tony Smithson
Vice President of Printing Operations, Bliss Communications

The U.S. Department of Commerce announced on Thursday, Aug. 2, that they had come to an “affirmative” determination on the Countervailing Duty (CVD) and Anti-Dumping (AD) tariffs. This means they determined the tariffs should be permanent.

However, the news is not all bad, and as we have seen with this entire process, it’s complicated.

Tony Smithson

Tony Smithson

Preliminary tariff announcements in January and March were an average of 6.53 percent for the CVD and 22.16 percent for the AD, for a total of 28.69 percent.

Commerce revised the amount for the CVD up to 8.54 percent, but the weighted average for “All Other Producers” for the AD was taken to 0 percent. This means that only one producer — Catalyst — is subject to the AD tariff of 16.88 percent. This is the big news.

» RELATED: Commerce Department revises newsprint tariffs

So, what does this mean for publishers?

Unfortunately, that’s also complicated.

A reduction in the tariff will not automatically translate to a reduction in the market price. However, it is possible that this decision could result in some price relief for publishers. It’s too soon to speculate on the timing or the amount, but we can be sure that the newsprint producers will be huddling over the weekend to decide on their strategies.

One negative part of the ruling is that Resolute, by far the largest producer in the market, went from a preliminary CVD of 4.42 percent (and 0 percent on the AD) to 9.81 percent. Because Resolute is generally the leader in setting market prices, they could possibly use this to justify an additional price increase, or at the very least limit any price reductions.

The International Trade Commission’s decision on the tariffs is due out Sept. 17, and that could change the picture yet again.

» RELATED: Sign the petition calling on the ITC to reverse newsprint tariffs

Some big unanswered questions remain. Will White Birch still plan to reopen the Bear Island, Va. mill as they announced last week? Will the reduction in the overall tariff delay Kruger’s exit from the newsprint market?

Although we don’t know the answers yet, WNA will continue to keep members as up-to-date and informed as possible.