From the Editor: Crippling Tariffs on Imported Canadian Newsprint
With all of the talk about the prospects for an international trade war initially fueled by tariffs implemented by the Trump administration — including imported steel and aluminum — those being imposed on imported Canadian uncoated groundwood paper (newsprint) aren’t top-of-mind. Nonetheless, the wounds they’re inflicting run deep.
In response, over a dozen Congressional lawmakers from both sides of the aisle, publishers, printers, advocacy groups and newsprint paper producers testified in Washington before the International Trade Commission (ITC) last month to express their strong opposition to the preliminary paper tariffs.
The ITC is reportedly slated to vote on Aug. 28 whether or not to make the import tariffs permanent. And the U.S. Department of Commerce was expected to render its decision on the matter by Aug. 2. Current tariffs on imported Canadian newsprint, which largely impact U.S. newspaper, book and circular printers and publishers, will become permanent if both organizations vote in favor to keep them in place.
In January, the Department of Commerce assessed preliminary countervailing duties on uncoated groundwood ranging from 4.4% to 9.9%, depending on the Canadian paper manufacturer. Then, it later added preliminary antidumping duties, on top of the countervailing tariffs, of up to 22.16%, resulting in total tariffs of up to a whopping 32% now being imposed.
The preliminary countervailing and antidumping duties by the Department of Commerce emanate from a complaint filed by North Pacific Paper Corp. (NORPAC), a single-location paper manufacturer located in Longview, Wash., which is owned by a New York-based hedge fund. NORPAC is one of five newsprint paper mills still remaining in the U.S., but it was the only one to file an antidumping complaint.
Similar bills have been introduced in both houses of Congress to eliminate, or at least delay, the tariffs. A bipartisan group of lawmakers in the U.S. Senate, led by Susan Collins (R-Maine) and Angus King (I-Maine), introduced a bill that would suspend the import taxes and require the Department of Commerce to complete a study on the consequences the tariffs will have on U.S. newspapers and the more than 600,000-employee-strong printing and publishing industry in general.
The bill would also suspend any action by the Commerce Department and the ITC on newsprint import duties until President Trump would receive the report and certify that the taxes are in the economic interests of the United States.
Aside from potential Congressional intervention, a coalition called STOPP (Stop Tariffs on Printers and Publishers) was formed in opposition to the tariffs. Comprising printers, including LSC Communications, Quad/Graphics, Valassis Communications and Worzalla; newspaper publishers; paper mills and distributors; and several industry-related associations; STOPP contends that claims of infringement ring hollow on several fronts.
For example, STOPP points to an ITC report issued last September that recognizes “newsprint tends to be supplied by producers in that region,” and that pricing subsequently reflects the regional marketplace. The report also found that almost 91% of imported Canadian newsprint comes into the Midwest and Northeast, while only 4.6% enters the Pacific Northwest — where the state of Washington-based NORPAC conducts business.
In addition, STOPP notes that the demand for newsprint in North America has shrunk by 75% since 2000, primarily due to the digital alternatives that are impacting newspaper publishers. Since 2007, 78 paper machines have been closed or converted, according to the coalition, eliminating more than 10 million metric tons from industry production capacity.
If made permanent, tariffs on imported uncoated groundwood paper from Canada will drive a further reduction in newsprint demand as newspapers and other print-based publishers have to cut their print production quantities, shift to smaller page counts, lay off workers, seek digital alternatives and, in worst-case scenarios, shut down completely.