U.S. paper imports from certain Chinese and Indonesian producers could cost more than twice as much because of duties to offset subsidies, according to initial estimates by the U.S. Department of Commerce.
The department found some exporters received subsidies of as much as 126 percent of their costs in China and 131 percent in Indonesia. Anti-dumping measures would lead U.S. Customs to require cash deposits matching the subsidies to authorize entry of the imports, according to a statement from the department on Tuesday.
The report follows a request from the United Steel Workers and four paper manufacturers including Packaging Corp. of America and PH Glatfelter Co. to impose duties on certain imports from China and four other countries, which they say are being sold at unfairly low prices. Higher rates should reduce the paper import flood from foreign competitors, according to Caitlin Webber, an analyst at Bloomberg Intelligence.
“When you are looking at duties that more than double the cost of imports, typically that is seen as prohibitive for importers,” Webber said in an interview on Tuesday. “You can imagine that would have a material impact on what imports look like.”
In 2014, the U.S. imported $54.1 million of uncoated paper from China and $200 million from Indonesia, the Department of Commerce said.
Final estimates for the import duties are due in November. The U.S. International Trade Commission will also weigh in before the duties are ordered.