Dept. of Commerce Tariffs on China, Indonesia Level Coated Paper Playing Field

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Appleton Coated LLC (Kimberly, Wis.), NewPage Corp. (Miamisburg, Ohio), and Sappi Fine Paper North America (Boston, Mass.), together with the United Steelworkers (USW), Pittsburg, Pa., this week commended the U.S. Department of Commerce for its preliminary countervailing duty determinations against subsidized coated paper imports from China and Indonesia. As a result of these determinations, the Department of Commerce will impose tariffs on imports of coated paper to offset the unfair advantage provided by subsidization.

The Department of Commerce found that Chinese coated paper was subsidized by an average rate of 8.38%. Asia Pulp & Paper (APP) producers Gold East, Gold Huasheng, Ningbo Zhonghua, and Ningbo Asia Pulp and Paper received a subsidy margin of 12.83%, while Sun Paper received a rate of 3.92%. In Indonesia, APP/Sinar Mas producers Tjiwi Kimia and Indah Kiat received a subsidy margin of 17.48%. All other Indonesian producers/exporters will be subject to this same rate. The result of the Department's actions will be the immediate requirement that these importers of paper from the subject countries will have to post bond or cash deposits in an amount equal to the announced margins pending final resolution of the cases later this year.

Specifically, in the China investigation, the Department of Commerce found that Chinese producers benefited from preferential lending, preferential income tax programs, tax credits for purchasing domestically-produced equipment, import duty, and VAT exemptions for imported capital equipment, research and development tax credits, and preferential provision of electricity. In the Indonesia investigation, the Department of Commerce found that the provision of timber for less than adequate remuneration, government debt forgiveness, and the government of Indonesia's ban on the export of logs provided countervailable subsidies to coated paper.

The next step following this week's announcement by the Department of Commerce comes in April when the Department of Commerce will issue its preliminary determinations in the antidumping duty investigations of coated paper from China and Indonesia. These trade cases are expected to take about a year to complete with a final resolution expected sometime this fall.