A threat to the American newspaper business
Every day at the News Media Alliance headquarters, a stack of newspapers arrives for me and the staff. But with the United States Department of Commerce (DOC) and the International Trade Commission (ITC) currently considering tariffs on Canadian newsprint, those days of screen-free reading could be coming to an end.
The fact that newsprint is being threatened is the work of one newsprint mill in the Pacific Northwest, NORPAC. In August 2017, NORPAC petitioned the DOC to begin applying tariffs to newsprint imported from Canada, claiming the imported paper was harming the U.S. newsprint industry. But NORPAC is not acting in the best interests of newsprint consumers or the U.S. paper industry at large—they are acting in their own interest and no one else’s.
The buying and selling of newsprint has always been regional, without regard for the border. Consumers of newsprint—from newspaper and book publishers to telephone directory manufacturers—tend to buy newsprint in their region, close to their printing operations. The printers who typically utilize Canadian newsprint are those in the Northeast and Midwest, where there are currently no U.S. mills operating.
But those regions are not newsprint deserts because of unfair trade by Canadian paper mills. Rather, newsprint mills shut down or converted to producing other, more profitable paper products when the demand for newsprint fell, something that has been happening steadily for decades. Since 2000, the demand for newsprint in North America has dropped by 75%.
But affordable Canadian paper has helped keep the printed news alive and flourishing well into the 21st century. With new tariffs, many smaller newspapers will feel their belts tightening. The combination of preliminary countervailing and antidumping duties increases the cost of imported newsprint by as much as 32%, and a number of newspapers have already experienced price increases and a disruption in supply. If the ITC and the DOC make these tariffs permanent in the coming months, it could lead some small local publishers to cut their print product entirely—or even shut their doors.
Some, like NORPAC, may argue that by imposing duties on Canadian imports we’re saving American jobs and boosting our own economy, but while that may sometimes be true for other industries, the opposite is true of newsprint.
What we’re seeing with the newsprint tariffs is not a government acting to try to better the economy for its citizens. Instead, it is “political arbitrage” by one private investment group—where they are effectively looking to use the U.S. government to tax local and community newspapers across the United States in order to bolster their own bottom line.
When considering whether to take NORPAC’s claims seriously, the DOC excluded input from U.S. newsprint mills owned by Canadian companies, specifically Resolute Forest Products and White Birch. Excluding manufacturers who, during the period of investigation, had three functioning newsprint mills in the U.S. because they have sister mills in Canada shows an unwillingness to understand the borderless newsprint industry and the restructuring that has taken place in recent decades.
If the tariffs on Canadian newsprint are allowed to stand, we’re not only risking a centuries-old relationship with our neighbors to the north, but we’re putting our own U.S. news industry in jeopardy. While the big national and regional papers may have less trouble finding the funds to keep their print editions coming, we could see small publishers lose footing, and those tiny local papers are some of the most vital members of our news community. Under the right conditions, those papers can find a way to maintain their footing, but if the newsprint industry can’t support them, those communities will become news deserts, and that’s a future none of us want.
We may not be able to save the entire industry by keeping tariffs off our paper, but we can keep it thriving while we re-position ourselves for the years to come. Having affordable newsprint will help us do that.
[David Chavern serves as president and CEO of the News Media Alliance. Chavern has built a career spanning 30 years in executive strategic and operational roles, and most recently completed a decade-long tenure at the United States Chamber of Commerce.]