April 20, 2018
Newspaper publishers across the U.S. already strapped by years of declining revenue say they’re dealing with an existential threat: Recently imposed tariffs on Canadian newsprint driving up their business costs.
The tariffs are a response to a complaint to the U.S. Department of Commerce from a hedge fund-owned paper producer in Washington state, which argues that its Canadian competitors are taking advantage of government subsidies to sell their product at unfairly low prices. The tariffs, imposed in January and increased in March, are not permanent yet. But newspaper publishers are bracing for another blow to an industry that has shrunk with the loss of advertising revenue to the internet.
According to the Vancouver Sun, critics of the paper tariffs say the businesses that will ultimately be harmed are not Canadian paper producers, but U.S. newspapers that will have to cut staff and reduce publication days to afford higher prices of newsprint — the sheets newspapers are printed on. The newspaper industry employs just over 150,000 Americans, which is about 276,000, or 65 per cent, fewer than two decades ago.
“To get an unbudgeted increase of this magnitude will be for many publishers very, very serious to catastrophic,” Tom Slaughter, the executive director of the Inland Press Association, which represents about 1,500 daily and non-daily newspapers in every state, told the Vancouver Sun.
A large metro newspaper can expect annual increases of about $3 million in printing costs, Paul Boyle, senior vice-president for the News Media Alliance, told the Vancouver Sun. While larger papers might be able to survive the increase, Boyle said smaller publications might not.
“I’ve heard from small publishers who’ve said, ‘I’m worried about shutting my doors,”‘ he said.
Boyle said his organization — formerly called the Newspaper Association of America — is compiling a survey from its member and nearly every publisher is exploring layoffs and scaling back news coverage.
Steve Stewart, publisher of The State Journal in Frankfort, Kentucky, told readers in a March 30 column that the newspaper they were reading cost 10 per cent more to produce than a few weeks earlier and could cost as much as 40 per cent more in a few months. He said this will result in fewer pages, higher subscription costs and less local content.
The newsprint tariffs reflect President Donald Trump’s tough new approach to U.S. trade relations. Trump is engaged in a tense standoff with China over Beijing’s sharp-elbowed attempts to gain access to U.S. technology. He’s trying to renegotiate the North American Free Trade Agreement with Mexico and Canada. And his administration has wrangled with Canada directly over low-priced Canadian timber imports, Canadian barriers to U.S. dairy farmers, and now cheap Canadian newsprint.
The International Trade Commission is expected to make a final determination on the tariffs in August or September.
Canadian newsprint producers began paying an average of 6.53 per cent more to export their products to the U.S. in January, when the Commerce Department concluded that would help offset the foreign paper mills’ advantage over American companies.
In March, the department increased the cost by another 22 per cent after its preliminary investigation concluded that one Canadian company, British Columbia-based Catalyst, was underselling the uncoated groundwood paper newspapers use by that much less.