Paper Tariffs — Will Commerce Be Swayed?
U.S. printers and foreign paper suppliers find themselves in the odd position of fighting for the same cause. Michael Makin, president and CEO of PIA/GATF, sent a letter opposing the CVDs to members of Congress, stressing that given the uptick in postal rates and energy costs, the printing industry could hardly reconcile the 5 percent rise in paper costs. Further, Makin pointed out that Canadian printers—out of arm’s reach from the impact of CVDs while firmly within the NAFTA free trade zone (not to mention just a geographically short distance away)—could have a devastating impact from a competitive standpoint.
As of press time, parties supporting the reduction and/or elimination of the CVDs were hitting the lobbying pavement. Julie Busbee, director of government affairs for PIA/GATF, acknowledged that the tariff rates could actually end up being higher, but said that her organization is doing everything in its power to have the CVDs set aside.
“What you have is two sides saying that the methodologies used to set the rates were incorrect, and here’s what they should be,” Busbee says. “We don’t know what Commerce will decide in the end, and anyone who tries to say what will happen is only guessing. We’re just doing all the leg work to ensure they’re as low as possible.”
Consumers Hurt Most
Ultimately, the people who will be hurt most by the CVDs are consumers, contends Tom Vendetti, president of China Paper Holdings, an international paper sourcing firm. The large-scale consolidation of the paper industry is leaving few choices for purchasers and, with the tariffs invariably prompting foreign sources to look elsewhere, supplies will continue to dwindle and prices will continue their upward trend.
“We’ve talked to paper buyers all over the country, and they’re all very nervous about consolidation. They welcomed options coming from offshore,” Vendetti says. “Now...paper buyers are subject to the whims of the U.S. paper industry, which is clearly making an effort to increase prices across the board.”