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Paper Tariffs Threaten Newspaper Industry

July 21, 2018

Tariffs, theoretically, help a domestic industry by preventing foreign producers from “dumping” their products at prices below cost to preserve or increase their market share. Independent U.S. Sen. Angus King of Maine succinctly demonstrated Tuesday, in a hearing before the U.S. International Trade Commission, why that theory is so much baloney relative to U.S. tariffs on Canadian paper products. The Trump administration has imposed tariffs of as high as 30 percent on the types of Canadian paper used for newspapers, magazines and commercial printing. It did so at the request of a single U.S. paper producer, Washington state-based NorPac. The company claimed competing Canadian companies were dumping paper in the U.S. below cost. Of course, the real problem with paper sales, generally, is that print publishing is in decline. Newspaper and magazine circulation is down, along with print advertising, thus reducing the market demand for paper. The U.S. newspaper industry, which employed 256,000 people in 2010, now employs 180,000. After personnel, paper generally is the second highest cost for newspapers. Smaller papers, especially, already struggling with circulation and advertising declines, are hard-pressed to deal with paper price increases of up to 30 percent resulting from the tariffs. As reported by the Everett Herald of Washington State, the impact is evident in Longview, Washington, the home town of the company that sought the tariffs. There, the paper company has returned about 50 people to work but the local newspaper is pondering layoffs because of the increased paper costs. Tellingly, NorPac was the only U.S. paper company that sought tariffs. That industry understands what King told the trade commission Tuesday: “If you end up with a smaller market, you haven’t helped anybody, let alone the plant in Washington that is petitioning for this help.” King and his Maine colleague, Republican Sen. Susan Collins, represent a major paper-producing state. They and another dozen lawmakers from around the country told the commission that raising tariffs that kill off newspapers won’t help paper producers sell paper. The commission should kill the tariffs, which adversely affect an entire industry while benefitting, temporarily, a single producer.

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