US slaps tariffs on Canadian paper imports

[WASHINGTON] The United States hit Canada with yet another round of punitive import tariffs, this time for as much as 10 per cent on paper used to print newspapers and books.

The US Commerce Department said in a statement late Tuesday night that the tariffs on uncoated groundwood paper came after an investigation launched in August found Canadian producers receive subsidies giving them an unfair advantage in the US market.

"Today's preliminary decision allows US producers to receive relief from the market-distorting effects of potential government subsidies while taking into account the need to keep groundwood paper prices affordable for domestic consumers," Commerce Secretary Wilbur Ross said in a statement.

This is the latest in a series of trade actions by President Donald Trump's administration, including several against Canada and China, as part of his "America first" policy.

The announcement comes as negotiators are set to begin the sixth round of talks later this month in Montreal, aimed at revamping the North American Free Trade Agreement that links the US, Canadian and Mexican markets.

The preliminary decision in this latest dispute hits Canadian companies with tariffs ranging from 4.42 to 9.93 per cent on exports of the paper, which in 2016 were estimated at US$1.27 billion, the Commerce Department said.

Canadian officials called the move "unjustified" and vowed to defend the industry.

"We are deeply disappointed with the unjustified preliminary countervailing duty rates," Foreign Affairs Minister Chrystia Freeland and Natural Resources Minister Jim Carr said in a statement.

And they warned that "Any duties will have a direct and negative impact on US newspapers, especially those in small cities and towns, and result in job losses in the American printing sector." The Commerce Department will announce a final decision on the paper imports in late May, which must then be reviewed by the US International Trade Commission (ITC).

The investigation was launched after a complaint from North Pacific Paper Company, which alleged that Canadian products had sold from between 23.5 per cent and 55 per cent below market rate.

The Trump administration already has slapped tariffs on Canadian softwood lumber and aircraft as part of a trade conflict between the neighboring countries.

The Commerce Department said that from January 20, 2017 it has initiated 82 antidumping and countervailing duty investigations - a 58 per cent increase from the previous year.

AFP