Newsprint tariffs force layoffs, print editions to disappear | Column

Gary Cohen | for USA TODAY NETWORK-Wisconsin

There is a good chance you are reading this on the broad sheet print edition of a USA TODAY NETWORK publication. What you might not realize is that it is now costing Gannett, which owns USA TODAY, significantly more to provide you with an “old-school” paper you can peruse at home, toss in your bag, or read on the train or plane.

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 last 30 years. 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 already 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. Just this week, The Vicksburg Post in Mississippi will stop producing printed editions on Mondays and Saturdays. An editorial in The Powel 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.

Remember as well that it is not only the news organizations that are being effected. Printers will see business dry up as customers move away from printed books, advertisements and a range of other items. Down the line, 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 long-term viability. No other U.S. paper mills support the tariffs. The economics of starting up a multi-million dollar 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.

President Trump promised a flinty-eyed 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 there is evidence that this is already underway. Harley Davidson’s announcement that it will move some production to Europe to avoid EU tariffs on motorcycles sold there 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. It should become evident that whatever short-term benefits of the tariffs to NORPAC and its roughly 300 employees, the long-term consequences for American employment and American journalism will be abysmal.

Hopefully you will be able to read all about it in your daily newspaper, but at this point, there is no guarantee of that based on recent actions.

Gary Cohen is clinical professor of supply chain management and international business at the University of Maryland’s Robert H. Smith School of Business.