Did Madison mill fail because of tariff?
Madison’s shuttered Madison Paper Industries mill is the focus of a Wall Street Journal story about what happened when a tariff on a Canadian product purportedly backfired.
The Wall Street Journal reported Monday that a 2015 tariff on magazine paper made in Canada set off a “cascade” of unintended consequences, including the 2015 shutdown of the Madison mill, which was owned by Finland’s UPM-Kymmene Inc. and a New York Times subsidiary. The mill’s closure resulted in 200 jobs lost. It was the fifth paper mill to close in Maine in three years.
U.S. operations of Canadian paper mills were also affected by the tariff. The U.S. Department of Commerce is looking at ways to scale back the tariff, the Journal reported.
“Maine’s push to penalize Canadian paper products illustrates how the desired aims of import tariffs to protect U.S. manufacturing and jobs may not always be achieved — especially for industries with deteriorating markets and economics,” the Journal reported.
The mill has since been acquired for an undisclosed price by a joint venture involving companies that specialize in re-purposing shuttered mills. The acquisition, which closed on Dec. 29, includes the real estate of the main paper mill site as well as all mill equipment.
New Mill Capital Holdings of New York, Perry Videx of New Jersey and Infinity Asset Solutions are the new owners of the Madison paper mill, which stopped production in May, resulting in the layoffs of 214 workers.
In a Dec. 30 release announcing their acquisition, the new owners stated they plan “to sell certain mill assets that are no longer usable on the property, as well as demolish some structures that are obsolete.”
“Once that process is complete, the property will be remarketed for alternative industrial uses,” the new owners stated. “Given the site’s abundant supply of both power and natural gas, as well as a clear height of over 50 feet, the property is a uniquely attractive asset for a variety of heavy industries.”
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