07.05.18

SCHUMER REVEALS: RECENTLY IMPOSED HARMFUL DUTIES ON GROUNDWOOD PAPER COULD COST SARATOGA SPRINGS QUAD GRAPHICS MORE THAN $90 MILLION A YEAR & HURT VULNERABLE UPSTATE NY NEWSPAPER INDUSTRY; SENATOR URGES DEPARTMENT OF COMMERCE TO PROTECT AT-RISK PRINTING & NEWSPAPER JOBS WHO DEPEND ON LOW PRICED PAPER FROM CANADA

In January 2018, The Department Of Commerce Imposed Preliminary Duties On Uncoated Groundwood Paper From Canada That Have Drastically Reduced The Profitability Newspapers And Printers Throughout Upstate NY

Schumer Calls On The Department Of Commerce To  Consider The Adverse Impact Duties Could Have On Companies Like Quad Graphics And Reverse Course 

Schumer: Permanent Duties On Canadian Paper Could Literally Stop The Presses At Our Newspapers And Printing Companies

Standing with representatives of Quad Graphics in Saratoga Springs, N.Y, U.S. Senate Minority Leader Charles E. Schumer expressed concerns over the progress of antidumping and countervailing duty investigations involving uncoated groundwood paper from Canada. Schumer said Quad Graphics, printers, and newspapers across New York could be negatively affected by Department of Commerce’s recent duties of this paper. Schumer urged the Department of Commerce to reverse course and consider the adverse impact the duties were having on domestic groundwood paper manufacturers before proceeding with the antidumping and countervailing duty investigations.

“Permanent duties on Canadian groundwood paper could literally stop the presses at our newspapers and printing companies like Quad Graphics across New York State. The bottom line here is that the Department of Commerce should reverse course. They should consider the lack of support from the domestic paper manufacturing industry for these duties and evaluate how permeant duties could place an unfair and unwise burden on an already at-risk and extremely vital American industry that provides so many jobs and so much value to New Yorkers from one corner of the state to the other,” said Senator Schumer. “I am all for fair trade, and I lead that fight on many fronts – especially against China – but when the feds implement policies or put in place misguided duties that threaten American jobs, a rise in prices for companies and consumers up and down the newsprint supply chain it’s time to yell: ‘Stop the presses’!”

Schumer said that Quad Graphics in Saratoga Springs, N.Y., as well as many other printers and newspapers across New York State, have continuously expressed their concerns over the antidumping and countervailing duty investigations involving the specialty newsprint that they import from Canada. Schumer explained that these investigations have the potential to solidify and finalize duties on Canadian uncoated groundwood paper imports. Schumer also expressed his concern with recent comments that the Department of Commerce made, claiming to not have expansive economic data on the impact of preliminary duties imposed on groundwood paper. Schumer explained that the initial duties have already increased newsprint prices by 24-28 percent above last year’s levels.

Schumer added, “It’s one of my top priorities to staunchly oppose reckless federal rules that could cost New York jobs and weaken the Upstate economy, and this investigation which could lead to the full implementation of these duties could do just. It could cause prices for printing companies like Quad Graphics to rise, and in turn, for the newspaper advertising revenue to fall. Thereby, endangering both great New York industries. It's short-sighted and I will do everything in my power to stop it.”

Schumer said that, in a hearing in front of the Senate Finance Committee on June 20, 2018, Secretary Ross asked members of Congress to submit data on the impact of the recent duties on groundwood paper to the Department of Commerce. While Schumer is no longer a member of the Senate Finance Committee, he still submitted information to the Department of Commerce from New York constituents. According to Schumer, Quad Graphics, a paper producer with over 850 workers in New York, has estimated that the duties will cost their company and their customers $90 million annually. Additionally, Schumer said that a small Spanish language publication is experiencing a 5-8 percent increase in expenses, and is looking at ways to reduce costs, including cutting down edit pages

Schumer explained groundwood paper imports are primarily used as newsprint. Quad Graphics uses the paper to print advertising sections for newspapers, catalogs, circulars, and magazines.  Schumer said constituents are concerned that the duties could have a particularly adverse impact in the Northeastern states because there is no domestic producer of this heavy, dense, specialty paper in the Northeast. Schumer said that New York printers and newspapers are concerned that due to the predominance of Canadian imports in the Northeast region, the lack of any U.S. groundwood producer in the region and the lack of production capacity in the U.S., duties could dramatically increase their operating costs.

Schumer has heard from many in printing and the newspaper industry in New York State and beyond that are worried that they will not be able to absorb these costs and would be forced to cut production and potentially go out of business. This could lead to an intensified shift to digital products in the industry, which could harm U.S. groundwood paper producers.

In March, the Department of Commerce assessed preliminary countervailing duties ranging from 6 to 9.9 percent on Canadian imports of groundwood paper, which are currently being collected. Commerce will assess preliminary antidumping duties in early March, which could be significantly higher than the countervailing duties. These investigations are scheduled to be finalized this month (duties are made permanent or not) when the ITC will decide whether or not there is injury or risk of injury to the domestic industry.

A copy of Senator Schumer’s letter appears below:

The Honorable Wilbur Ross

Department of Commerce

Dear Secretary Ross:

I write on behalf of my constituents in the groundwood paper value chain. Paper manufacturers, like Quad Graphics in Saratoga Springs, New York and newspapers across New York have continued to express their concerns with the antidumping and countervailing duty investigations involving uncoated groundwood paper from Canada. I am writing to provide you with information from my New York constituents on the impact of these duties. I again urge you, as the Commerce Department enters its final phase of these investigations, to use your discretion as consistent with our trade remedy laws to consider the domestic industry’s support for these investigations and the adverse impact to domestic groundwood paper manufacturers before proceeding with these investigations. 

In a hearing of the Senate Finance Committee on June 20, you asked members to submit to you data on the impact of the recent duties on groundwood paper. While no longer a member of this Committee, I would like to share with you the following information from a couple of my constituents. 

Goundwood paper duties have increased newsprint prices by 24-28 percent above last year’s levels are forcing paper manufacturers and small local papers to make hard decisions. Quad Graphics, a manufacturer of paper inserts with over 850 workers in Saratoga Springs, New York, has estimated that the duties will cost their company and their customers $90 million annually. Many small and regional newspapers in New York have informed me that they are not be able to absorb costs or pass them along to their customers and have been forced to cut back on employees or page numbers. A publisher of few small Spanish language publications has informed me that they are experiencing a 15 percent increase in expenses and will be forced to cut pack on page numbers. These publications are often the primary source of news in many Hispanic communities. Another small paper in the Albany region is experiencing a 5 percent increase in expenses and has also made page cuts to their newspaper. 

A decline in the downstream paper industry could lead to an intensified shift to digital products in the industry, which could harm U.S. groundwood producers. It is my understanding that the American Forestry Paper Association, which represents 80 percent of U.S. paper manufacturers, has expressed their concerns with these investigations for this reason.

Again, I urge you to use your discretion as consistent with our trade remedy laws to revisit the domestic groundwood paper industry’s support of these investigations and consider the adverse impact to domestic groundwood paper manufacturers before proceeding with these investigations.

Thank you for your attention to this issue.

Charles E. Schumer

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