Tariffs expected to increase cost of newsprint

The Wisconsin Newspaper Association, National Newspaper Association and News Media Alliance are encouraging members to contact Congress to push back against preliminary tariffs that could drive up the cost of newsprint prices.

Tony Smithson

Tony Smithson, vice president of printing operations for Bliss Communications in Janesville, said increased costs on uncoated groundwood paper are likely under preliminary countervailing duties issued Monday by the U.S. Department of Commerce, but the increases will not be as steep as originally anticipated.

“Overall, this is good news, but it will likely lead to at least some price increases,” said Smithson, who advises the WNA on production-related policies. “It’s not the 25 percent that we were warned about, so that’s progress.”

The first round of countervailing duties were announced by the U.S. Department of Commerce on Monday and will begin affecting Canadian paper producers on Jan. 16. The new duties will range from 4.42 to 9.93 percent.

Countervailing duties are a type of tariff that is levied on imported goods to offset subsidies made to producers in the exporting country, according to the financial education website Investopedia.com.

This is the first of two announcements on duties, as the Department of Commerce is also expected to release a preliminary decision on antidumping duties on March 8. Anti-dumping duties are described as a “protectionist tariff” that is imposed on imported goods that a domestic government believes are priced below fair market value, according to Investopedia.com.

The U.S. International Trade Commission will conduct its own final investigation on the case later in the spring and is expected to reach a final determination by September.

“(These) penalties are essentially permanent, unless there’s a separate agreement under NAFTA (North American Free Trade Agreement) that eliminates them,” Smithson said. “That is, of course, extremely unlikely in the current political environment.”

So far, 34 members of the House of Representatives and eight members of the U.S. Senate have signed letters in opposition to the duties that were sent to Commerce Secretary Wilbur Ross.

The petitioner for the countervailing and antidumping duties is the North Pacific Paper Company (NORPAC), which owns a single paper mill in Washington. The company is owned by a New York hedge fund operator with no other pulp or paper operations in the U.S. or worldwide, NMA said in a long list of talking points on the issue.

“We are stunned that a single U.S. mill in Longview, Wash., has been able to manipulate the trade laws to their gain, while potentially wreaking financial havoc on newspapers and other commercial publishers across the country,” said David Chavern, president and CEO of NMA, in a statement. “… This decision and its associated duties likely will lead to job losses in U.S. publishing, commercial printing and paper industries.

“The well-documented decline in the U.S. newsprint market is not due to unfair trade, but to a decade-long shift from print to digital distribution of news and information,” Chavern added. “Now, we will all literally pay for one manufacturer’s manipulation of our country’s trade laws.”

In response to the news, NNA President Susan Rowell urged publishers to attend the NNA’s Community Newspaper Leadership Summit March 14-15 in Washington, D.C., to “aggressively urge Congressional action to oppose a misguided tariff that jeopardizes community newspapers.”

“We join our colleagues at the News Media Alliance in fighting back against this ill-advised trade action,” Rowell said in a statement. “Instead of protecting American jobs, as the Department of Commerce is mandated to do, it puts in jeopardy the jobs of thousands of people in our industry, the printing industry and related trades and professions. We must make sure Congress understands the gravity of this threat.”

WNA members are encouraged to contact Sen. Ron Johnson, Sen. Tammy Baldwin and their local U.S. Congress representatives to voice opposition to the newsprint duties.