Stopping The Presses?

Yankton, South Dakota

By Randy Dockendorf

(July 27, 2018)

Dave Bordewyk grew up around weekly newspapers, including a stint as editor for his brother’s Douglas County publications.

But because of newsprint tariffs, Bordewyk fears a number of weekly newspapers may not survive much longer. And many daily newspapers are also struggling with soaring newsprint costs.

Bordewyk sees the problem firsthand as executive director of the South Dakota Newspaper Association (SDNA). The organization, headquartered in Brookings, represents the state’s 125 daily and weekly newspapers.

“I have been talking to some publishers of weekly newspapers who have had their newsprint bills go up tremendously,” he said. “The Grant County Review in Milbank said its newsprint cost went up 15 percent this spring, and they’re looking at another double-digit increase later this summer.”

Those rapid, large increases are hitting newspapers hard during an already tough rural economy, he said.
“Translated for weekly newspapers, those increases mean anywhere from $50 to $200 a week,” he said. “You may think, ‘It’s only $50 a week.’ But when you take it over 52 weeks a year, it really adds up for a small newspaper.”

Those newspapers can’t fully absorb the cost increases or easily pass them along to subscribers and advertisers, he said.

“As a result, I’ve had a few very small newspapers say this may be the final nail in the coffin,” he said. “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.”

Numerous daily newspapers are also feeling the economic squeeze, Bordewyk said.

“One publisher said, for every order of newsprint, it was an additional $1,200 per truckload just as a result of the tariff,” he said.

South Dakota newspapers are hit especially hard because most of them purchase their newsprint from Canada, which has been slapped with the tariff, Bordewyk said.

He clarified one misconception surrounding the newsprint tariffs.

“The tariffs went into effect earlier this year and were not initiated by the Trump Administration,” he said. “People confuse things and believe this is part of the new Trump tariffs. They connect the issue to the president, but this is a separate matter.”

The Commerce Department imposed the tariffs last March on Canadian newsprint, or uncoated groundwood newspaper. The department initiated the tariffs in response to a complaint from the North Pacific Paper Company, a mill in Washington State.

Bordewyk emphasized the tariffs weren’t sought by other United States paper mills.

“This is brought about because of a single company,” he said. “It alleged that Canada was unfairly dumping newsprint onto the American market and that Canada subsidized production of (its nation’s) newsprint.”

The Canadian newsprint comes from logging on federal lands, which accounts for the Canadian government’s role in the industry, he noted.

AWAITING A DECISION

The issue may come to a head within a few weeks. The United States International Trade Commission (ITC) held a hearing last week in Washington on whether the newsprint tariffs should continue.
The ITC expects to make a decision later this summer.

Nineteen members of Congress spoke against the tariffs on Canadian newsprint, telling the ITC the import tax hurts local newspapers.

The South Dakota congressional delegation — U.S. Sens. John Thune and Mike Rounds and U.S. Rep. Kristi Noem — submitted a joint statement opposing the preliminary duties. They urged the rejection of the tariffs imposed on the import of certain Canadian paper, including newsprint.

The letter noted the newsprint tariffs already exert a negative impact on South Dakota newspapers.
“The preliminary duties have been bad enough, and additional final duties have the potential to devastate rural newspapers in South Dakota,” they wrote.

“In rural areas lacking reliable Internet access, newspapers remain a trusted source of information for our constituents. Because of this, rural businesses rely more heavily on printed news than other places for advertising.

“Should newsprint prices continue to increase, rural newspapers will be forced to charge advertisers more and/or pass the increased costs onto their readers.”

The practical level for such action has been reached — and even exceeded — by most publications, the delegation wrote in its statement.

“Potential closures (of newspapers) not only would cost precious jobs in South Dakota’s rural communities but also would leave our constituents without access to a principal source of information,” they wrote.

“In short, our local communities and industry have become the victim of the trade remedies that are intended to protect them.”

SDNA is a member of STOPP, a nationwide coalition of publishers and printers fighting the newsprint tariffs. STOPP estimates the tariffs threaten more than 600,000 jobs in the U.S. printing and publishing industry.

SEEKING RELIEF

SDNA members met recently with Rounds and with Thune and Noem staffers in Washington.
In a column, Rounds noted the tariffs are climbing as high as 32 percent and “would be devastating to South Dakota newspapers.”

The South Dakota publications, and many others across the nation, are caught in an economic vise grip, Rounds wrote.

“Around 75 percent of newsprint used to print papers in the United States comes from Canada,” the senator wrote. “During our meeting, SDNA (members) told me that a semi-truck load of 850-pound rolls of newsprint will cost an additional $4,000 to $5,000 per shipment with these costly tariffs.”

After the meeting with SDNA members, Rounds signed on to co-sponsor S. 2835, the Protecting Rational Incentives in Newsprint Trade (PRINT) Act of 2018. This legislation, introduced by Sens. Susan Collins (R-Maine) and Angus King (I-Maine), would suspend the import taxes on uncoated groundwood paper while the Department of Commerce examines the effects of tariffs on the publishing and printing industry.
“A final decision on making them permanent could come in September, and we hope to have a resolution before then,” Rounds said.

STRUGGLING TO SURVIVE

A permanent newsprint tariff would force changes in the newspapers that many people have come to expect, Bordewyk said.

“A lot of South Dakota’s smallest weekly newspapers are the most vulnerable. There is only so much they can do to absorb the costs or pass it along,” he said.

“For those newspapers who are able to keep their doors open, you’ll see less content. They will have to reduce the size of those papers and print fewer pages each week in order to hold down expenses.

The current problem for South Dakota newspapers, and those across the nation, is reflecting the overall economic woes in rural areas, Bordewyk said.

“Advertising is down in newspapers, both dailies and weeklies alike. For a long time, newspapers in South Dakota and the rest of the Midwest seemed insulated from whatever was going on in the global market,” he said.

“But the advertising has gone down and has also started moving into social media such as Facebook. We need to face what is happening now.”

CHANGES AHEAD?

The SDNA board has discussed the economic challenges, along with the tariffs, threatening the existence of many member newspapers, Bordewyk said.

“We just had a board meeting with the discussion on whether papers will need to go online,” he said. “There are still consumers today, particularly in the Midwest, who want a printed newspaper. They want that hard-copy version. It’s the preferred method for readers and advertisers in those communities. You can’t simply force a community newspaper to go online.”

The printed newspaper provides a written form of sharing news, Bordewyk said. The written word and photos keep communities informed and connected while providing a permanent record, he said.
In addition, the move to online newspapers would clash with an argument that surfaces in the Legislature nearly every year — bills allowing public government bodies to put their own records and proceedings online rather than in local newspapers.

Relying strictly on online public records would be dangerous, Bordewyk said. He pointed to the lack of a permanent record, with government bodies able to take down or alter minutes and other legal proceedings.
In addition, online records could be hacked, altered or deleted by outside sources, he argued.
“It’s been demonstrated time and again, where we see the importance of written records that are kept permanent,” he said.

Bordewyk sees the ITC decision as crucial and literally a make-or-break for many community newspapers.
“There’s no way to sugar coat it. This is crunch time for newspapers,” he said. “This issue of tariffs makes it very challenging for newspapers to survive.”

The impact of the newsprint tariff greatly impacts state’s, Bordewyk said.

“On the flip side, the good news is that South Dakotans still value newspapers and rely on the printed word to keep their communities engaged and informed,” he said.

“South Dakotans still want to know what is going on in their communities and across the region. Hopefully, that path forward is there and we can keep newspapers going forward.”

Despite the challenges facing the profession, Bordewyk sees journalism playing a crucial role now more than ever for democracy.

“Whether it’s newspapers as we know it or some other format, journalism will continue to play an important role,” he said.

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