Tariffs on Canadian paper 'detrimental' to troubled US newspaper industry

14/05/2018 12:00 - 69 total view

Donald Trump’s trade tariffs and anti-dumping penalties have pushed the cost of imported Canadian newsprint up by 30%

The troubled US newspaper industry is taking another hit from Donald Trump – recently imposed trade tariffs and anti-dumping penalties have pushed the cost of imported Canadian newsprint up by 30%.

The duties were imposed after petitions made by US-based pulp and paper manufacturers claiming that Canada’s exports of uncoated groundwood paper are unfairly subsidized by the Canadian government.

In January, the commerce department imposed “temporary” import duties of up to 10%. Two months later, it added anti-dumping duties of 22.16% for some Canadian paper producers and exporters.

Newsprint typically makes up 20% of a newspaper’s costs, or the second highest cost after people, and the effect of the tariff hikes is already being felt.

Papers, already suffering a collapse in advertising, are taking the blow hard.

The Tampa Bay Times is shedding 50 jobs to cushion the blow of $3.5m in additional yearly paper costs. The Salt Lake Tribune has also initiated staffing layoffs and cuts to print product offerings.

David Chavern, president of the News Media Alliance, a trade body representing almost 2,000 news organizations, described the cost hikes as “unprecedented” and warned that layoffs related to newsprint costs are likely to continue.

“Unfortunately, I think we’re going to hear of more. This is already an industry under severe economic stress, and this is in effect a tax on a troubled industry to benefit a small number of people, most notably one investment fund in New York,” he said.

The complaint over Canadian imports came from North Pacific Paper Co, one of a handful of US producers still in operation.

Chavern said his group had warned the company’s owners, New York-based One Rock Capital Partners, that its actions were “unwarranted” and would “ultimately be extremely detrimental to the business they say they serve”.

“The tariffs are driven by political arbitrage by one investment firm that is trying to use the government to tax its customers and augment its bottom line,” he said.

A spokesman defended the company’s action in bringing a complaint to the commerce department. “We are not asking for anything but a level playing field with the Canadian producers,” he  The company did not return a call from the Guardian.

The dispute has revealed the precariousness of newsprint production in the US, which 20 years ago supported 15 mills, and of the newspaper industry itself. 

Frank Romano, professor emeritus at Rochester Institute of Technology and an expert in printing, called the situation “a mess” that could have a devastating effect on US publishers. 

The damage, he warned, was already being done by an administration that was acting on the concern of one small producer in the north-west that had priced its product too high to compete.

He warned that not only newspapers would be affected. While raw newsprint comes mostly from Canadian softwood, it was also used in glossier products used for magazines and newspaper inserts.

He accused the government of acting with haste and warned the business might not be able to withstand the wait as the issue works its way through the courts.

While some news organizations have managed a transition to subscription-based, digital news distribution the industry at large remains vulnerable.

Earlier this year, the industry trade publication News & Tech warned that “the biggest assault on newspapers will be related to newsprint in 2018”.

In addition to newsprint costs, the industry is also experiencing higher costs relating to an increase in the cost of aluminium, another commodity hit by Trump’s tariffs, used to make newspaper printing plates and hikes in the cost of ink.
Source: The Guardian