the visible hand

it is the theory which decides what can be observed – einstein

U.S. Sets New China Duties

Posted by ecoshift on June 13, 2007

While these measures intend to protect US companies the impact on US companies busy moving manufacturing capacity overseas may be quite different. New duties could significantly impact IP’s cost/benefits analysis of “downsizing” domestic mills coupled with “ambitious expansion plans into Russia, China and Brazil.”

I googled Printing Industries of America (PIA) to find out which companies are members, but the main website has no public listing…

US places tariffs on Chinese paper imports to rescue local industry | printweek.com
Matt Whipp, printweek.com, 08 June 2007

The US Commerce Department has said it will impose tariffs on paper imports from China to help save its struggling paper industry…The planned tariffs will also affect paper imported from South Korea and Indonesia, although these will be lower than those imposed on imports from China.

Nearly 100 paper and paperboard mills have closed in the US over the past six years.

However, industry body Printing Industries of America (PIA) reacted negatively to the news, which will result in higher paper prices for printers…

“PIA is a strong supporter of free and fair trade both at home and globally. As such, we believe that striking an appropriate balance between protecting the domestic producer and the end-user of an internationally traded product is critical. We hope that the full anti-dumping and countervailing duty investigations weigh seriously the impact of the printing industry as it considers the economic ramifications of imposing tariffs on foreign sources of CFS paper, and that it determines such penalties are unwarranted.”

US giant International Paper has closed four US mills in the past two years and laid off 25,000 staff – more than a fifth of the its total workforce…
The other side of the equation has been rising timber prices, eating into paper margins, especially with the news that Russia is to impose export duties on timber in order to bolster its domestic paper industry…
It’s something International Paper is well aware of. At the same time as its domestic downsizing, it is funding ambitious expansion plans into Russia, China and Brazil with £1bn ($2bn).”

The paper industry in Canada is also troubled, this time by the dynamics of currency more than competition… UPM-Kymmene executive vice president, magazine division, Jyrki Ovaska told printweek.com: “The combination of weak rates between the US dollar and Canadian dollar and between the Euro and US dollar have meant operation is not profitable.”

And, globally, paper is under pressure from overproduction, he added. “There is still overcapacity in the magazine paper production industry (not just UPM but all businesses operating in this area).

“In addition, the continued decreasing prices for magazine papers means the combination of poor exchange rates, operating costs and unprofitability means the company has taken the decision for a minimum nine-month shutdown.”

Over the past year, UPM-Kymmene permanently ceased production of 530,000 tonnes of coated magazine paper to reduce overcapacity and improve profitability…

U.S. Sets New China Duties – WSJ.com
Move Opens Door For a Wide Array Of Trade Complaints
By GREG HITT
March 31, 2007; Page A3

WASHINGTON — The Bush administration imposed new economic sanctions against China, a vivid reflection of the increasingly tough climate in the U.S. toward free trade — particularly with Beijing.The new duties apply narrowly to complaints that Chinese producers of glossy, high-quality paper used in books and magazines are unfairly subsidized by their government — just $224 million of annual imports, or less than 1% of the total goods and services Americans buy each year from China.

But the action is likely to have much wider ramifications. It opens the door to a potential rush of similar complaints by American manufacturers, from steel to plastics producers, that face stiff competition from the Chinese. And it signals, more broadly, an increasingly harder line on trade emerging both at the White House and in Congress.

John Engler, president of the National Association of Manufacturers, has long called on the Bush administration to take a tougher stance on trade and praised the decision for giving U.S. companies new “recourse” to blunt “China’s distortions of trade.”

The dollar slipped in the foreign-exchange market following the late-morning announcement, as currency traders showed nervousness about rising trade tensions — particularly since China happens to hold a large quantity of U.S. currency, stocks and bonds.

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