Read about current trade war in newspapers — at least for now
There is a good chance you are reading this on the broad sheet print edition of one of the USA TODAY NETWORK’s publications.
What you might not realize is that it is now costing Gannett, which owns USA Today and its six publications across Tennessee, significantly more to provide you with an “old-school” paper.
The reason it is costing Gannett and scores of other publishers and printers more money is that the Commerce Department, in response to claims by one U.S. company that Canada unfairly subsidizes its paper mills, has imposed anti-dumping and countervailing import duties adding up to over 30 percent on Canadian Uncoated Groundwood Paper, or newsprint. This has a huge impact. Paper is the second biggest line item cost for publishers of newspapers, books, and other printed media. Labor is the first.
This has been the case for years, but there is much less elasticity when it comes to absorbing 30 percent price hikes than in the past.
Profit margins have been shrinking for years as many readers and advertisers have moved to online formats. About one third of daily newspapers have disappeared in the past 30 years.
More viewpoint
‘Massive new tax’
For the Tampa Bay Times, this translates to a jump in price from $600 to $800 for each of the 17,000 tons of newsprint it uses in a given year, or more than $3 million a year, according to CEO Paul Tash.
The results of the tariffs are evident. This spring, The Tampa Bay Times laid off 50 employees and the The Salt Lake Tribune announced a 38 percent reduction in its newsroom staff.
Recently, The Vicksburg Post in Mississippi will stop producing printed editions on Mondays and Saturdays.
An editorial in The Powell Tribune in Wyoming summed it up well, saying, “It’s a massive new tax that interferes with private business and disproportionately punishes rural America.”
Each day the tariffs remain in place, expect more print editions to disappear. Readers should get used to less coverage of school boards, town councils, and other news that matters to individuals and sustains robust and informed public discourse.
Not just newspapers
Remember it is not only the news organizations that are being affected.
Printers will see business dry up as customers move away from printed books, advertisements, and other items. This will mean less work for hundreds of small businesses that supply and service the print industry. Roughly 600,000 jobs are at stake.
So why would the government keep these tariffs in place? Because management at NORPAC, a paper manufacturer in Washington State, claims that Canadian imports have been harming them and threaten the firm’s viability.
No other U.S. paper mills support the tariffs. The economics of starting up a multi-million newsprint production line don’t add up. They would rather have competitively priced newsprint available so demand for paper is sustained. That is better for business.
Once again tariff decisions made to support a company or industry often have unintended consequences that will result in a net job loss.
For more commentary, go to commercialappeal.com/opinion/
Reevaluate tariffs policy
President Trump promised a flintyeyed reevaluation of whether U.S. trade policy is delivering what was promised. But now it is the indiscriminate imposition of tariffs itself that needs to be reevaluated.
President Trump surely does not want U.S. workers and companies to be worse off because of his trade policies. But it is happening. Harley Davidson’s announcement it will move some production to Europe to avoid EU tariffs on motorcycles sold there, stop making its iconic motorcycles in the U.S. to survive steel tariffs, is the most prominent recent example.
Many battles over steel, aluminum, agricultural commodities and more could be played out in summit meetings, U.S. courts, and the World Trade Organization for years to come.
But with regard to newsprint tariffs, relief for U.S. publishers and printers could be just months away. The U.S. International Trade Commission will convene a hearing July 17 as part of its investigation of NORPAC’s petition.
Gary Cohen is clinical professor of supply chain management and international business at the University of Maryland’s Robert H. Smith School of Business.