Impact of US tariffs limited as paper firms redirect exports

THE impact of United States tariffs of up to 99.65 percent on China's exports of glossy paper should be limited, as some companies have already shifted to other markets, analysts said yesterday.

The US Department of Commerce on Wednesday said it would impose duties of 23.19 percent to 99.65 percent on Chinese glossy paper imports, saying they were sold below market value.

This is the second penalty tariff targeting Chinese companies in two months.

"This is no doubt negative news (to Chinese exporters)," said China International Capital Corp analyst Wu Fengshu. "Chinese exports to the US will be reduced or even be forced to quit that market."

But the impact should also be limited, Wu added, as many Chinese companies have started shifting their exports after the US announced anti-subsidy duties of up to 20.35 percent on Chinese glossy paper on March 30.

China's Ministry of Commerce, which in March said the tariffs were unacceptable, was not available for comment yesterday.

The March action was the first time in 23 years that the US had applied countervailing duties to goods from so-called "non-market economies."

Shares of Shandong Chenming Paper Holdings Ltd, China's leading glossy paper exporter to the US market, tumbled 9.18 percent to 9.99 yuan (US$1.30) yesterday in Shenzhen.

"Now the duty is too high, we have to adjust our export portfolio and our export destinations," an official at the export department at Chenming said yesterday. But she said she was unable to provide exact figures.

US imports of glossy paper from China rose 166 percent in 2006 by volume from a year before and were valued at an estimated US$224 million, according to the US Department of Commerce.

These moves may postpone the opening of some proposed new glossy paper plants in China, Shenyin & Wanguo Securities Co analyst Zhou Haichen said.

The US is expected to make a final determination on the latest anti-dumping duties, which also affect Indonesian and South Korean exporters, in October.