Due to abundant resource availability and high demand for printed materials, the paper industry has long been an important part of the manufacturing sector in the United States. But unfair imports from a number of countries have negatively impacted production in key segments of the paper industry, particularly for products experiencing declining demand due to the growth of e-commerce.

In late 2010, U.S. producers of sheeted coated paper suitable for high-quality print graphics, including Appleton Coated, NewPage Corporation, and Sappi Fine Paper North America, obtained relief from dumped and subsidized imports from China and Indonesia. That case will be undergoing a five-year “sunset” review later in 2015. Moreover, on March 13, 2015, Indonesia belatedly requested WTO consultations with the United States with respect to the antidumping and countervailing duty measures imposed. Indonesia also claims that the International Trade Commission’s threat of material injury determination was based on speculation and that the determination did not establish a causal nexus between the unfair acts and injury to the domestic industry. Such consultations are a required precursor to a formal WTO challenge.

More recently, the U.S. producers of sheeted uncoated paper, typically used as copy paper, obtained an unanimous affirmative preliminary injury determination from the Commission with respect to alleged unfair imports from Australia, Brazil, China, Indonesia, and Portugal. Petitioners in the uncoated case are Domtar Corporation, Finch Paper, P.H. Glatfelter, Packaging Corporation of America, and the United Steel Workers. In a March 2015 public determination, the Commission rejected arguments that imports from certain of the subject countries did not compete with the U.S. producers.

The Commission recognized the importance of maintaining high capacity utilization and reasonable prices due to the highly capital intensive nature of the industry. A new paper machine is estimated to cost over $600 million, and a new greenfield pulp mill would cost over $1 billion. The Commission noted that purchasers had shifted purchases of uncoated paper from U.S. producers to subject imports since 2011 due to lower prices. Purchasers also reported that U.S. producers had reduced prices to compete with subject imports since 2011. The industry’s production of uncoated paper, its shipments, its market share, and its employment levels all declined from 2011 to 2013, and continued to decline in 2014. The industry’s profitability fell sharply from 2011 to 2013, and, although operating profits improved somewhat in interim 2014 as compared to interim 2013, the ratio of income to net sales in interim 2014 remained below the 2011 level. This case now moves to the Department of Commerce for determination of the margins of dumping and illegal subsidies, and will return to the Commission for a final injury investigation, which is likely to occur in early 2016.

Even more recently, the Commission made a unanimous affirmative preliminary injury determination with respect to supercalendared paper imported from Canada. This paper product is typically used for magazines and advertising circulars. The case was brought by the two largest

U.S. mills still producing supercalendared paper, Verso Corporation and Madison Paper Industries. The Commission’s public report on its preliminary determination is likely to be issued in mid-May. This case involves only illegal subsidies, primarily to Port Hawkesbury Paper in Nova Scotia, and does not include dumping allegations. The supercalendared paper case will move relatively quickly because it is limited to illegal subsidies, and thus Commerce’s preliminary and final countervailing duty determinations will be issued this year and the case will return to the Commission for a final injury determination in early fall 2015.