WASHINGTON-The American government hit the Canadian forestry industry with more duties late Tuesday as it upheld counterveiling duties on Canadian newsprint. 

The News Media Alliance, a coalition of media organizations that includes approximately 2,000 newspapers in the USA and Canada, denounced the Commerce decision in a statement Tuesday. This is on top of an average 6.53 per cent in countervailing duties levied in January, bringing the total to more than 26 per cent. 

The effects of the combined duties are expected to hit newspapers in smaller US communities especially hard.

 "Some small-market or rural newspapers, with slim margins, will close", he said. This definition includes but is not limited to standard newsprint, high bright newsprint, directory paper, book publishing paper as well as printing and writing papers. 

The new duties were announced two months after another Commerce investigation concluded that Canadian provincial governments are unfairly subsidizing newsprint. 

It's not much consolation that this is less than the nearly 55 per cent rate requested by the Washington-based North Pacific Paper Company which filed a petition in August 2017 alleging Canada was dumping newsprint in the United States.

DOC said it would announce its final determination on or about 2 August 2018. 

The preliminary decision comes as part of a Commerce investigation into Norpac's claim that Canadian papermakers are selling uncoated groundwood paper - the same paper used for newsprint - at less than fair value. 

The duties could harm about 20 Canadian paper mills, according to the Forest Products Association of Canada. 

The Commerce Department focused its investigations of the groundwood issue on three Canadian companies, which it refers to as mandatory respondents. 

With preliminary countervailing duties already in place, Catalyst and Kruger are now facing combined duties of 28.25% and 32.09%, respectively.

Port Alberni's mayor says the move could have a significant impact on the mill and the community. The Commerce Department hit Resolute with countervailing rate of 4.42 per cent in January, but did not impose an anti-dumping tariff. 

In a news release, Kruger called the duties "unfounded", and denied dumping its products. Canada has won previous disputes with the United States over softwood lumber. 

Foreign Affairs Minister Chrystia Freeland and Natural Resources Minister Jim Carr warned of severe consequences.

The U.S. trade action, which follows the imposition of stiff duties against Canadian softwood lumber a year ago, comes amid tough renegotiations among the United States, Canada and Mexico on the decades-old North American Free Trade Agreement.