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Newsprint tariffs:  What’s next?

The International Trade Commission voted 5-0 on August 29th to reverse the newsprint tariffs that have increased newsprint costs by about 30% since January.  This is a huge win for newspapers and local communities across the country.  But what happens next?  And how did we get here in the first place?

A brief summary

NORPAC, a mill in Washington State owned by hedge fund One Rock Capital Partners, asked the U.S. Department of Commerce and International Trade Commission to impose tariffs on Canadian uncoated groundwood, claiming dumping.  The Department of Commerce imposed preliminary tariffs in January 2018.  Canadian paper companies have been paying those tariffs at the border since then and the deposits have been held by the U.S. government.  Many paper manufacturers raised prices significantly to cover the cost of the tariffs.  Those decisions were made by market forces and no newspaper publishers have paid the tariffs.

The newspaper industry was very clear about how these tariffs could decimate the industry and reached out to legislators, wrote editorials and took other actions to mitigate the rising costs.  MDDC's members were particularly active, traveling to Capitol Hill to meet with legislators and inviting members of Congress to tour their facilities.  That hard work paid off. 

What next?

The ITC voted to reverse the tariffs August 29th.  In mid-September, they will release a report detailing the reasoning behind their decision.  At that time, the Department of Commerce will instruct the Customs and Border Patrol to stop collecting tariffs.

NORPAC has until September 17th to appeal this decision, and it is not clear whether they will appeal or not.  If they do appeal, tariffs would NOT be reimposed, unless there is some unusual action. 

Over the next three to six months, the U.S. government will return the cash deposits that were collected from the newsprint manufacturers (the importers of record).  Manufacturers are not going to provide a refund to newspapers, as it was market forces that drove up the prices in the first place.  The best situation will be if newsprint prices stabilize or go down; however, mills have decreased capacity over the last two years to sustain prices. 

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