UPDATE 2-U.S. finds Canada groundwood paper dumped, sets duties

(Adds reaction from Catalyst spokesman, paragraph 10)

WASHINGTON, March 13 (Reuters) - The U.S. Commerce Department said on Tuesday it had made a preliminary finding that some imports from Canada of uncoated groundwood paper used in newsprint were dumped, and imposed preliminary duties of up to 22.16 percent.

The antidumping duties are below those alleged by the Washington state petitioner, North Pacific Paper Co, of 23.45 to 54.97 percent, the department said in a statement.

"This reduction in margins represents the Departments commitment to a process that is fair for all parties involved," it said.

A final decision in the investigation is expected about Aug. 2, it said.

The decision follows an announcement in August by the Commerce Department that it was launching an investigation into whether the product used in newspapers was being sold at below-market rates in the United States, and whether Canadian producers were receiving unfair subsidies.

In 2016, imports of uncoated groundwood paper from Canada were valued at an estimated $1.27 billion, it said.

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

As a result of the latest decision, U.S. customs authorities will collect cash deposits from importers of the paper from Canada based on these preliminary rates, the department said.

Catalyst Pulp and Paper Sales Inc and Catalyst Paper General Partnership, a privately owned producer, was slapped with the top 22.16 percent antidumping duty.

"We are reviewing the information," said John Corry, a spokesman for Richmond, British Columbia-based Catalyst Paper. He said Catalyst would issue a statement later.

Resolute FP Canada Inc and Donohue Malbaie Inc, both subsidiaries of Resolute Forest Products Inc, along with privately owned White Birch Paper Canada Co group and related companies Papier Masson WB LP, FF Soucy WB LP and Stadacona WB LP, were assigned a zero percent duty, Commerce said.

The agency also set a preliminary dumping rate of 22.16 percent for all other producers and exporters of the newsprint product from Canada.

As part of President Donald Trump's campaign to crack down on unfair trading, the Commerce Department has launched 102 antidumping and countervailing duty investigations from Jan. 20, 2017, through March 13, 2018, up 96 percent from the same period in 2016-2017. (Reporting by Eric Walsh; Additional reporting by Nicole Mordant in Vancouver; Editing by Eric Beech and Lisa Shumaker)