Newspapers Face Rising Costs Due To Trump Commerce Department Tariffs

by Lynda Bryant-Work

Community newspapers are being threatened by a newsprint tariff imposed on Canadian paper mills by the Trump administration in January.

In a decision opposed by some Republicans, the U.S. Commerce Department imposed a 22.16 percent import tariff on Canadian newsprint companies it says are unfairly pricing their paper against U.S. mills.

A final decision in the investigation is expected about Aug. 2, the Commerce Department said, but U.S. Customs authorities began collecting cash deposits immediately from Canadian importers based on the preliminary duty rate.

The tariffs issue arose following a complaint filed last in 2017 by the Longview, Washington-based North Pacific Paper Company that claimed Canada was dumping newsprint into the U.S. market and unfairly subsidizing its industry at home.

According to the National Newspaper Association (NNA), one paper mill is trying to use the federal trade and tariff laws to make newsprint, or uncoated groundwood paper, in paper parlance—about 50 percent more expensive. If it succeeds, the prices of newspaper printing will skyrocket.

The problem, the NNA and many publishers point out, is the insufficient capacity of the few mills in the U.S. to meet newspaper needs. Mills have been closing in both the U.S. and Canada because papers are using less newsprint to counter falling revenue. They are also moving strategically into digital news delivery.

The largest Canadian suppliers targeted by the U.S. newsprint tariff are Kruger and Catalyst Paper Corp. but there are also several smaller mills affected. The Canadian companies are expected to pass at least some of the tariff on to U.S. newspapers, causing a major cost problem for an industry already facing tough economic challenges from declining advertising and subscription revenues.

Newsprint accounts for about 20 percent of newspaper expenses. Canada is the largest exporter of newsprint in the world and the principal supplier for U.S. newspapers. At the time the tariffs were imposed, newsprint was around $570 per metric ton.

U.S. publishers and commercial printers have strongly objected to tariffs on uncoated groundwood paper, which is also widely used in book publishing and advertising circulars.

News Media Alliance (NMA), an organization that represents most American newspapers, has said tariffs will lead to job losses and likely cause some smaller newspapers and printers to close. Several members of Congress have also voiced opposition to tariffs on imported Canadian paper.

The U.S. newspaper publishing and commercial printing business employs about 600,000 people in cities and towns across America.

According to the NNA, there are things people should know about newspapers:

  • Newspapers are important to community life and democracy. The National Newspaper Association thinks it is important for all sorts of newspapers to survive for the sake of a free society—the very large and the very small ones, the liberal ones, the conservative ones, the middle-of-the-road ones, the ones with no viewpoint but just important news, all of them. America needs them like we need oxygen.
  • Even if a newspaper seems to be “online,” the digital copy that people may count on probably couldn’t exist if there weren’t a printed newspaper behind it. The newspaper in print supports all of the other versions economically. If the printed version disappeared, it can’t be assumed all would be well because it is online anyway. It won’t be.

According to the NNA, Canadian paper producers have supplied the U.S. for many years, while more than a dozen U.S. mills have stopped making newsprint in the last decade because demand for paper has declined. Even if Canadian paper disappeared because of high tariffs being proposed to the federal government, the U.S. paper mills could not supply newspapers with the paper they need.

Mills cost hundreds of millions of dollars to build and can take many years to be safely situated in compliance with environmental rules. With demand falling, the NNA said no one is going to invest in a massive expansion of U.S. newsprint. Over the short term, tariffs could force the price of paper up and the New York investors who own the Washington State mill may gain, but the country will lose.

The NNA warns that small-town and community newspapers could vanish and challenged newspapers will have to cut back. Even healthy newspapers will have to find ways to absorb a daunting new cost.

And who will pay? The NNA says everyone who relies on a newspaper to tell the local stories, cover elections, advertise sales, get pictures of the winning touchdown, and cheer the economic development people on in their work of creating new jobs.

Both the NNA and NMA are organizing small and large newspapers, journalists, printers and publishers across the U.S to launch petitions and groups to fight the tariffs as costs and shortages impact their daily publications and threaten the print news industry

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