Newsprint Tariff May Be Costly To Everyone

Yankton, South Dakota

(July 30, 2018)

America’s newspapers are coping with the painful fallout of this chaotic age of tariffs and trade wars.
As reported in Saturday’s Press & Dakotan, the United States has imposed tariffs of more than 30 percent on Canadian newsprint, which has resulted in a sharp spike in prices for the paper upon which newspapers are printed. That is creating the specter of personnel layoffs for newspapers and printing plants — or worse, the closure of some newspapers, especially those that serve small, rural communities.

That’s why press associations and lawmakers in South Dakota and Nebraska, as well as states across the nation, are sounding the alarm about this tariff, the blame for which can really be placed on one company in the Pacific Northwest.

The Trump Administration imposed the tariff at the behest of the North Pacific Paper Company, a newsprint producer in Washington state. The company charges that Canada’s subsidizing of its newsprint industry (which is done because a great deal of the logging comes from federal forests) amounts to giving Canadian mills an unfair advantage by allowing them to market newsprint below cost in the U.S. market. Newspapers here purchase 75 percent of their newsprint from Canadian mills.

The results are potentially devastating. In particular, it may well sound a death knell for numerous weekly newspapers that serve small towns and are really the only form of local coverage these markets have.
“… I’ve had a few very small newspapers say this may be the final nail in the coffin,” said Dave Bordewyk, president of the South Dakota Newspaper Association. “They’ll be forced to close their doors because they can no longer continue their publications. They can’t deal with those kinds of price increases, particularly so quickly.”

This tariff is a threat not only to the livelihood of newspapers, but also to the people who count on the printed product for their information on what’s happening in their community and what their local governing bodies are doing.

In that sense, it is, as Gov. Andrew Cuomo (D-New York) put it, an economic assault on the spirit of the First Amendment to the U.S. Constitution — the people’s right to know.

It can also have costly consequences — literally — in other areas.

A study released earlier this month by the Brookings Institute indicated that the closure of local newspapers, particularly in areas where there are relatively few newspapers serving the citizens (i.e. rural areas), can increase local government borrowing costs. Explaining the statistical phenomenon, the authors of the study theorized that “closing local newspapers increase government borrowing costs because (1) less information is publicly available, and (2) local officials are no longer monitored as closely, reducing the quality of governance.” The study indicated that the removal of newspapers from markets is related to the “deterioration in many government efficiency metrics, including government wage rates, government employees per capita and tax dollars per capita.”

The study also found that “alternative sources of media, such as the internet, are not acting as sufficient substitutes for local papers.”

So, there is much more at stake in this tariff fight than the rising cost of paper upon which a newspaper is printed. It can also impact your right to know and your right to decide on issues impacting you.

This issue is producing a rare bipartisan moment in Congress, with both Democratic and Republican lawmakers speaking out against this measure and warning of the impact it may have on local journalism in numerous communities.

“In rural areas lacking reliable Internet access, newspapers remain a trusted source of information for our constituents,” South Dakota’s congressional delegation wrote in a joint letter opposing the tariffs. “Because of this, rural businesses rely more heavily on printed news than other places for advertising.”

This tariff, driven by just one U.S. company, may have disastrous consequences that range far beyond the financial confines of the newspaper industry. It is a mistake, and it should be repealed by the U.S. International Trade Commission before those consequences become all too real and possibly irreversible.

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