Trump administration's newsprint tariffs take a toll on Georgia papers
Posted August 7, 2018 4:03 p.m. EDT
ATLANTA -- The U.S. Commerce Department announced last week that it will move forward with tariffs on Canadian newsprint, a move that has already taken a toll on local newspapers nationwide.
The Commerce Department first imposed tariffs in January after a paper company in Washington state claimed that Canadian manufacturers were benefiting from government subsidies and selling paper at an unfairly low rate. The department decided Thursday to lower the maximum tariff rate from 22 percent to 16.88 percent. In addition, it will counter Canadian subsidies by imposing levies of up to 9.81 percent on certain newsprint sellers.
Even with the slight reduction, newspaper editors across Georgia said the tariffs place an additional strain on an industry already struggling to cover costs. In Georgia, more than 12 percent of jobs in the news industry have disappeared in the past five years, according to the Bureau of Labor Statistics, as print news outlets have struggled to remain profitable in an increasingly digital era.
Canada, which is the world's biggest producer of newsprint, exports about 2.3 million tons annually to the U.S., its top consumer, according to the Department of Commerce.
And the company that runs Georgia's only newsprint paper mill -- one of the few remaining in the U.S. -- also expects the tariffs to damage its market in the long term.
The International Trade Commission, which held hearings with lawmakers, newspaper editors and paper mill owners in July, could vote to overrule the tariffs when it makes a decision later this month.
Among the hardest-hit by the tariffs are small, local newspapers. Tariffs have driven up production costs across the state, said Robert M. Williams Jr., who owns or co-owns papers in Alma, Blackshear, Forsyth and McRae.
"In the markets served by community newspapers, there is usually no other source to provide comprehensive, reliable local news coverage," Williams said. "These tariffs are accomplishing nothing but driving up costs for newspapers. Some of us can't help but wonder if that is the only real purpose."
Dan Ponder, the publisher of The Donalsonville News, said the increased cost of printing has forced the paper to cut down the size of its weekly edition by about 15 percent to 20 percent.
"It is ironic that the tariffs result in less real news being printed in what is often the only local news source in small-town America, the small-town community newspaper," Ponder said.
While the newsprint tariffs were intended to help paper mills in the U.S. compete with those in Canada, paper industry leaders said they fear the levies will harm the market. Resolute Forest Products operates paper mills in the U.S. and Canada, including a newsprint mill outside Augusta, Georgia, that is one of two in the Southeast, and officials there think the tariffs will hurt business.
"The industry started closing inefficient mills in Canada and the United States many years ago as supply began to outstrip demand," Resolute Senior Vice President John Lafave said last month at an International Trade Commission hearing. "Demand, however, is continuing to decline, and soon there will be too much supply and the industry will once again close the least efficient paper mills."
The only vocal advocate for the tariffs is North Pacific Paper Co., a paper mill in Washington state funded by the New York-based One Rock Capital Partners. The company's executives say tariffs on Canadian newsprint are necessary to make American paper mills competitive.
"Low-priced imports from Canada have taken sales volume from us," North Pacific CEO Craig Anneberg said last month during an International Trade Commission hearing. "This unfair competition significantly eroded our profitability."
U.S. Sen. Johnny Isakson, R-Ga., has co-sponsored a bipartisan bill to oppose the tariffs, citing their impact on news outlets and the paper industry.
"I've talked with publishers and others in the newspaper and printing industries who are already feeling the crushing weight of these misguided new taxes," Isakson said in a statement. "I will continue to work to pass our legislation and fight these harmful taxes on our printing industry."
Paul Boyle, the senior vice president of public policy at News Media Alliance, said an overruling of the tariffs by the International Trade Commission would be the most surefire way to avoid a long-term blow to the newspaper industry.
"These tariffs were put in place to help the newsprint industry, but in reality what they're going to do is hurt the market," Boyle said. "It's damaging to local communities -- many small, local communities rely on the local paper. No one else is covering them."
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