A Republican Senator from Maine is warning about the consequences of U.S. tariffs on Canadian paper producers, saying the extra costs of two cents’ worth of newsprint per copy will be painful for American newspapers.
U.S. tariffs on Canadian uncoated groundwood paper, including newsprint, are hurting and not helping the American newspaper industry, Senator Susan Collins argues.
“These tariffs present serious consequences,” Ms. Collins said in a recent letter to U.S. Commerce Secretary Wilbur Ross.
North Pacific Paper Co., a newsprint producer based in Longview, Wash., lodged its trade complaint with the Commerce Department last August.
Norpac now asserts that there have been relatively small increases in costs per paper copy after the preliminary tariffs imposed earlier this year triggered a rise in prices for newsprint produced in both Canada and the United States.
Norpac estimates, for example, that The Wall Street Journal’s newsprint costs could potentially climb to 12.5 US cents a copy, an increase of 2.1 US cents compared with 10.4 US cents before the tariffs took effect earlier this year.
Ms. Collins said the extra costs amount to a jump of 20 per cent in projected newsprint bills at the Journal, or slightly above 2 cents US a copy. She argues that despite the seemingly small hike in newsprint costs a copy, the pennies add up to a lot of money for the large newspaper that publishes six days a week.
Based on a conservative forecast, the tariffs could cost the Journal about US$22,000 each day that it publishes, or US$6.86-million a year, Ms. Collins said.
“The anti-dumping and countervailing duty trade remedies are not equipped to address a situation like this where the import duties will actually harm the industry they were intended to protect,” she said.
The local newspaper in Norpac’s hometown, Longview, is forecast to pay 6.1 US cents a copy for newsprint, or a hike of 1 US cent for each issue of The Daily News since the tariffs took effect, according to Norpac.
“The tariffs are having an appreciable effect on smaller newspapers and their ability to hire American workers in local communities,” Ms. Collins said.
Earlier this year, the Commerce Department imposed preliminary duties averaging 28.69 per cent against most Canadian newsprint sent south of the border.
A bipartisan group led by Ms. Collins and Independent Senator Angus King, both from forestry-intensive Maine, first unveiled its strategy in May to combat the U.S. tariffs. The group has introduced the Protecting Rational Incentives in Newsprint Trade (PRINT) Act of 2018, hoping to win political support for suspending the preliminary duties against Canadian uncoated groundwood paper such as newsprint and book-grade paper.
In her letter to Mr. Ross, Ms. Collins said the bill proposes pausing the U.S. tariffs to give the Commerce Department more time to study the matter.
“The Canadian uncoated groundwood paper case is unique because of the special role newspapers and publishers play in our free society and for local businesses,” she said. “Our bill would suspend the import taxes on this paper while the Department examines the health of – and effects on – the printing and publishing industries.”
The Commerce Department sided earlier this year with Norpac, ruling that groundwood from Canada is subsidized and being dumped at less than fair value.
Last September, the U.S. International Trade Commission issued a preliminary ruling that the U.S. groundwood industry is being injured by Canadian shipments. The commission is scheduled to hold a hearing on July 17, and publicly issue its final determination two months later.
Maine and Pennsylvania, to name just two states, are seeing newspapers already on financially shaky ground get further rattled, some U.S. politicians say.
Pennsylvania Senator Robert Casey, a Democrat, said newspapers in his state have been hit hard. He pointed to a survey by the Pennsylvania NewsMedia Association, which said 84 per cent of the group’s members have reduced their page counts, 44 per cent have not filled vacant positions and 22 per cent have reduced staff.
Mr. Casey sent a letter to Mr. Ross earlier this month to voice the concerns of newspapers in his state, noting how some readers continue to rely on print editions. Mr. Casey cited comments from the Pennsylvania NewsMedia Association, which warns that “newspaper staff size and employee benefits may be reduced” and “we may need to implement price increases for subscribers and advertisers.”