(June 18, 2018)
Amid a flurry of tariffs announced by Washington recently — on Canadian aluminum and steel, and just Friday on $50 billion worth of Chinese semiconductors, plastics and other imports — one particularly affects the news you read about your community.
The Commerce Department levied a 6.2 percent tariff on uncoated groundwood paper from Canada — the stuff you’re holding in your hands if you’re reading this in print — back in January. Two months later, the U.S. government raised the tariff by 22 percent.
The tariffs responded to a complaint by a single paper mill in Washington state, but the aggressive tact toward Canadian newsprint imports has had a deep effect on publishers broadly. Newsprint is generally one of the largest expenses for a publisher after employee salaries and wages. By some estimates, this tariff will force U.S. publishers to spend 20 to 30 percent more for this crucial raw material.
It’s an unwarranted tax on an industry that employs hundreds of thousands of people — and that serves an important role in civic discourse and the lives of our communities.
It’s especially strange that such a ground-shaking piece of protectionism was dialed up in favor of a single paper mill that employs about 250 people.
Yet, this is what we face in the name of North Pacific Paper Co. of Longview, Washington.
The mill, owned by One Rock Capital since 2016, claimed the Canadian government was engineering subsidies for the paper mills on its side of the border, which supply 60 percent of the market. The U.S. Commerce Department found enough compelling evidence of this to warrant a temporary tariff to give a handful of U.S. suppliers relief “from the market distorting effects of potential government subsidies” in Canada.
What all that means is the news about your community is now much more expensive to produce. This includes news about your city’s budget, the high school graduation, yesterday’s arrests, next weekend’s festival, the store opening on Main Street, and the score from the softball or lacrosse or baseball team. And, of course, the comics and classifieds and obits and Dear Abby.
In a letter to Commerce Secretary Wilbur Ross in December, members of the News Media Alliance, including this newspaper, noted the already precarious business situations of many of the group’s 1,100 members. The letter talks of community newspapers navigating declines in print readership, along with growth in digital audience, and the growing pains that have come with that transition.
The letter also suggests that this single paper mill’s complaint, which has not been joined by any of the other handful of U.S. paper mills, could represent a tactic by One Rock Capital to inflate the value of its business “without any regard for the dramatic negative implications for U.S. newspapers in thousands of small cities and towns.” All of this pain and expense, then, is really borne for a single business.
The Commerce Department is set to decide later this summer whether to make the newsprint tariff permanent. We trust, presented with the volume of evidence about the ripple effects of this duty, that U.S. officials will abandon it.
In the meantime, Congress should advance a bipartisan bill filed by Maine Sens. Susan Collins and Angus King to direct the Commerce Department to better gauge the high costs of this tariff, along with the economic well-being of the U.S. newspaper and publishing industry, while freezing collection of the new tariff.
Studying the impact of this unwarranted tariff is an important step, but of course, it is just a step. The Commerce Department’s only choice should be to dump it altogether.