Tariff Issue

Who are we? 

We are printers, publishers, paper suppliers and distributors that represent mostly small businesses in local communities that employ more than 600,000 workers in the United States.

What is the issue? 

A single paper supplier, NORPAC, alleges that Canadian imports of uncoated groundwood paper (UGW), which is used for newsprint, directories, book publishing, circulars and other products, are being subsidized or shipments are being dumped into the United States.  NORPAC has asked for duties that range up to 50 percent on the purchase price of Canadian paper. 

NORPAC is an outlier, owned by a New York hedge fund, with no additional pulp or paper operations in the United States or globally.  Majority of U.S. newsprint manufacturers, and even the trade association for the U.S. paper industry – the American Forest and Paper Association – as well as their U.S. customers, oppose the NORPAC petitions.  A single paper producer, with less than 300 employees, is manipulating the trade laws, while threatening hundreds of thousands of workers and companies. 

Who else is opposed?

A range of other business associations and state agencies, including state economic development departments, chambers of commerce, and associations of printers and publishers; religious publications, state and local political officials; think tanks, such as the Heritage Foundation.

What is the status? 

Countervailing Duties:  The Department of Commerce (Commerce) released, on January 9, its preliminary determination assessing countervailing duties on uncoated groundwood.  These duties range from 4.4 to 9.9 percent with an average of 6.53 percent. 

Antidumping Duties: On March 13, Commerce released preliminary anti-dumping duties that range from 0 to 22.16 percent depending upon the manufacturer. This means that some Canadian imports of newsprint will be assessed duties of up to 32 percent – right now at the border – as the investigation in this case continues. The duties are already causing a price shock and a disruption in the marketplace.  The next phase in the process is for the International Trade Commission to initiate its final investigation which includes questionnaires, public comment period, and a hearing. A public hearing is likely to occur in early August, with an ITC final determination in mid-September. 

Where does NORPAC’s claims fall short?

An overwhelming majority of Canadian imports are not in NORPAC’s regional market.

The ITC issued a report in its preliminary investigation (September 2017) which recognized that “newsprint tends to be supplied by producers in that region,” and pricing reflects the regional marketplace.  The report also showed that almost 91 percent of Canadian newsprint comes into the Midwest and Northeast, and only 4.6 percent enters NORPAC’s region (the Pacific Northwest), undermining NORPAC’s claim of harm due to international trade. Transportation costs simply make it too expensive to ship newsprint produced in the Northwest to the Midwest or Northeast.

A decades-long shift toward digital platforms is the reason for the financial harm to U.S. newsprint producers; not unfair prices from Canada.

Industry economists say the prices for newsprint are dictated by the usual rules of supply and demand.  Since 2000, the demand for newsprint in North America has declined by 75 percent.  As a result, many US producers have been hurt financially.  Other producers have simply left the business – either closing mills or converting them to other grades of paper where there is more demand, such as linerboard which is used in packaging for e-commerce companies (e.g. Amazon).

Tariffs will hurt, not help, the U.S. newsprint industry.

Producers have already alerted U.S. buyers that they would have to pass along the full measure of the tariffs, which are already being collected. Printers and publishers are not able to absorb these increased costs and will be forced to cut production, print fewer pages, and shift more of their content and – subscribers – to digital platforms.  This cost cutting will drive down demand for newsprint, ultimately hurting U.S. newsprint manufacturers, including NORPAC. 

The request from a sole petitioner threatens thousands of jobs in the United States.

Tariffs will force companies to cut jobs not only at newspapers, commercial printing, and book publishing operations, but throughout the supply chain, such as ink suppliers, fuel producers, and equipment manufacturers.  In addition, in most small towns, the printed newspaper or small commercial printers that fulfill direct mail campaigns are the mediums for small businesses to reach their customers, particularly in areas where digital advertising is limited given absence of broadband.  If newspapers and printers were forced to close, advertisers would lose an important outlet for promoting goods and services. Furthermore, in these small towns, citizens will lose an important source of news and information, including information from their representatives in our nation’s capital. 

Closures / Conversions of Newsprint Mills 2007-2018

Since 2000, the demand for newsprint in North America has declined by 75 percent. As a result, North American mills have either closed newsprint producing machines or converted them so that they could  produce other, more financially stable, paper products. Since 2007, 78 machines have been closed or converted, which has eliminated 10,175,000 metric tons from the industry’s capacity for production.

NORPAC continues to argue that Canadian paper suppliers’ imports are subsidized, which is what they believe is a significant problem to their business. When, in fact, the decades-long  transformation from print to digital platforms, is the reason that newsprint mills throughout North American have taken a financial hit to their businesses. Placing unnecessary tariffs on Canadian paper would only ignite the financial problems of paper suppliers and news organizations and cause the reverse effect of what NORPAC’s petition is trying to achieve.

The following interactive map show the North American mills that have shut down or converted machines since 2007.