Association for Print Technologies Opposes Trump Tariffs: Creates Information Portal
Opposition to Trump Administration tariffs on aluminum, steel, Chinese products and Canadian uncoated groundwood (UGW) paper has become the top priority of Association for PRINT Technologies (APTechSM) government affairs advocacy. Individually, and even more so collectively, these tariffs add needless and damaging costs to technology suppliers, printers and other down-steam customers, and threaten to put a drag on the overall U.S. economy.
In response, APTech has appealed to the President, met with Commerce Department officials, submitted testimony to the House Ways and Means Trade Subcommittee, and allied itself with several multi-industry coalitions that are seeking congressional action to staunch the onslaught of these ill-advised tariffs, which are a tax on American businesses and consumers. To communicate its actions in response to these tariffs, APTech has established this Tariff Information Portal on its website to track tariff-related developments and receive input from APTech members and their customers.
Section 232 Tariffs on Aluminum and Steel
After an investigation by the U.S. Department of Commerc (DOC) cited national security concerns, in March 2018 President Trump issued proclamations under the authority of Section 232 of the Trade Expansion Act of 1962 (9704 and 9705) imposing a 10% tariff on aluminum and 25% tariff on steel imported into the United States. But, before the tariffs were imposed, the President suspended them until May 1 for the EU, Australia, Argentina, Brazil, Canada, Mexico and South Korea, and said Canada and Mexico could be excluded if North American Free Trade Agreement (NAFTA) negotiations succeeded. Countries with security relationships with the U.S. were offered a “satisfactory alternative” to the tariff if one could be found, and agreements were reached with Argentina, Australia and Brazil. On April 30 the President delayed the tariff one last time until June 1 when it was imposed on the EU, Canada and Mexico.
Overall, eight U.S. trading partners—the EU, Canada, China, India, Japan, Mexico, Russia and Turkey—have noticed retaliation against the United States potentially impacting approximately $39 billion in U.S. exports, including a high proportion of U.S. manufactured goods, from steel and aluminum products to motorcycles and vehicles to processed food and distilled spirits.
Section 232 Tariffs Exclusion Process
In March the Commerce Department also announced a protocol for seeking an exclusion from the tariff for any aluminum or steel article determined not to be produced in the United States in a sufficient and reasonably available amount or of a satisfactory quality and based on specific national security considerations. But, requests for relief are restricted to directly affected parties located in the United States. More than 24,000 exclusion requests for steel and aluminum products have been made public thus far, but far fewer have been granted.
Congressional objections to this process have been raised on due process and procedural fairness grounds. The House Ways & Means Trade Subcommittee held a hearing (see APTech's submission to the hearing) during which the flawed process received deserved criticism. In its submission APTech strongly opposed the Trump tariffs on aluminum and steel, because they needlessly increase costs for printing technology suppliers and their customers, which greatly outweigh any benefits to a narrower segment of the economy that supplies aluminum and steel. This is especially egregious where no domestic source exits. Printing plate manufacturers’ cost have gone up as have plate prices for printers while suppliers pursue exclusion requests.
Section 301 Chinese Tariffs
In August 2017, President Trump directed the U.S. Trade Representative (USTR) to investigate Chinese trade practices under Section 301 of the Trade Act of 1974. At the conclusion of this investigation USTR determined that the acts, policies, and practices of the Chinese government related to technology transfer, intellectual property, and innovation are unreasonable or discriminatory and burden or restrict U.S. commerce resulting in harm to the U.S. economy of at least $50 billion per year.1 In a March 2018 response to the investigation's conclusions, the President directed USTR to: (1) open a World Trade Organization (WTO) dispute on Chinese licensing practices, (2) propose measures restricting Chinese investment "aimed at obtaining key U.S. Technologies", and (3) propose 25% Ad Valorem Duties on imported Chinese goods "with an annual trade value commensurate with the harm caused to the U.S. economy." 2
In April 2018 USTR announced a proposed list of 1,333 tariff lines for which Chinese goods would be subject to additional duties of 25%. After public hearings and a public comment period, this list was narrowed to just over 1,100 lines and broken into two distinct sets. The first set, List 1, is 818 lines accounting for ~$34 billion of Chinese imports; the second set, "List 2," contains 284 proposed tariff lines accounting for ~$16 billion of Chinese imports. The list 1 tariffs went into effect July 6 while the list 2 products are currently in a public comment period, awaiting implementation.
After tariffs went into effect on the original list of Chinese imports (list 1), China announced corresponding tariffs on 545 goods,3 imported into China from the U.S. from sectors ranging from automobiles to agriculture, which also went into effect on July 6. Additionally, they announced a separate set of 114 goods from sectors like chemical products, medical equipment, and energy products, which were proposed, but not yet officially implemented. In response to this, President Trump instructed the USTR to propose an additional set of goods, "List 3" accounting for roughly $200 billion of Chinese imports, which originally would have had a 10% duty added, but now may have a 25% tariff imposed. The third list of goods is expected to have public hearings and an open comment section in August. Each of the three lists include printing technologies.
1,2 USTR Section 301 Fact Sheet
3 Zhong, Raymond. "China Strikes Back at Trump's Tariffs, but Its Consumers Worry". The New York Times. 6 Jul. 2018.
APTech Response to Proposed Section 301 China Tariffs
In response to the proposed Section 301 tariffs on certain Chinese products, APTech joined other interested associations in their opposition to China’s unfair trade practices and disagreed with the use of tariffs as leverage against them. A comprehensive USTR Section 301 Report rightly identified the key issues that U.S. businesses face in China. In a letter to United States Trade Representative Robert Lighthizer, APTech and its free-trade allies have strongly recommended the Trump Administration use the results of the report to consult closely with industry stakeholders and Congress to develop a joint approach that will address these longstanding commercial issues within China. Only through extensive collaboration and alignment can the Administration develop and execute a strategic policy to effectively address our shared issues of critical concern in China. A continued escalation of a trade war will not benefit either country.
Canadian UGW Paper Duties
If aluminum, steel and Chinese product tariffs weren’t enough, a single paper supplier, NORPAC, alleged that Canadian imports of uncoated groundwood paper (UGW), which is used for newsprint, directories, book publishing, and circulars, are being subsidized or shipments are being dumped into the United States, putting downward pressure on price.
In September 2017, the International Trade Commission (ITC) made a preliminary determination that there was a “reasonable indication” of injury or threat of injury, which is a very low bar for moving forward. In January 2018 the Department of Commerce (DOC) released its preliminary determination assessing countervailing (anti-subsidy) duties on UGW imports from Canada. These duties ranged from 4.4 to 9.9% with an average of 6.53%. In March, DOC released preliminary anti-dumping duties that ranged as high as 22%. This means that some Canadian imports of newsprint are being assessed new taxes of up to 32%—right now at the border—as the investigation in this case continues. The duties are already causing a price shock and a disruption in the marketplace.
Although in this case their application is not warranted, antidumping and countervailing duty laws provide American businesses and workers with an internationally accepted mechanism to seek relief from the harmful effects of the unfair pricing of imports into the United States. Commerce currently maintains 456 antidumping and countervailing duty orders which provide relief to American companies and industries impacted by unfair trading practices.
On August 2 the DOC announced its affirmative conclusion in the investigations and issued slightly revised rates for anti-dumping and countervailing duties. Though lower, the revised rates are still damaging to the industry. The next step in the process is a determination in mid-September by the U.S. ITC of whether the Canadian imports have damaged the domestic paper industry. If the ITC finds in the affirmative, the duties will remain in place; conversely, a finding of no damage terminates the investigation and repeals the duties.
A majority of the U.S. newsprint manufacturers and even the trade association for the U.S. paper industry—the American Forest and Paper Association—oppose the NORPAC petitions for import duties on Canadian newsprint. A decades-long shift toward digital platforms is the chief disruptor of U.S. newsprint producers, not unfair pricing from Canada. Since 2000, the demand for newsprint in North America has declined by 75%. The newsprint tariffs that are now being assessed are harming newspapers, printers and the U.S. newsprint industry. Higher costs of 25 to 30% are forcing publishers and printers to take steps to reduce production, print fewer pages, reduce distribution, and shift more of their news and advertising content to digital platforms.
The paper industry and its allies in the newspaper, printing and supplier community, including APTech, have been fighting these ill-advised duties collectively through the Stop Tariffs on Printers and Publishers (STOPP) Coalition. STOPP has been successful in garnering much congressional opposition to the DOC duties, both in testimony before the U.S. ITC, and in support of the PRINT Act (S. 2835 / H.R. 6031), which would put a pause on the new tariffs until the ITC studies and reports on the impact of the tariffs on the printing and publishing industry.
For more information contact Association for Print Technologies Vice President, Government Affairs Mark J. Nuzzaco at 703-264-7235 or firstname.lastname@example.org.