PD Editorial: Slapping a tariff on the news

President Donald Trump tries to undermine the media by railing against “fake news,” but his administration's most pernicious attack on America's free press might be a recent decision to impose tariffs of up to 32 percent on newsprint imported from Canada.

Earlier this year, the U.S. Commerce Department sided with a New York hedge fund, One Rock Capital, seeking help for a paper mill it purchased in Washington state in 2016. The mill - North Pacific Paper Co., known as Norpac - alleges that it's losing business because Canada unfairly subsidizes its newsprint producers, undercutting competitors across the border.

There are a multitude of reasons for the decline of mills like Norpac, including the newspaper industry's growing reliance on digital. Two decades ago, there were about 15 newsprint producers in the United Sates. Today, the number has dwindled to five as U.S. newspapers have bought 80 percent less newsprint over the same period.

“I think it's pretty clear that the predominant challenge out there isn't about imports; it's about declining demand,” says Mark Pitts, an executive at the American Forest and Paper Association.

The trade association and nearly every member of the paper industry opposes the tariffs, largely out of concern the higher costs will damage newsprint customers and further reduce the need for products from U.S. sources.

Norpac is already benefiting from the tariffs; it has announced plans to add 50 employees. The jump in newsprint costs, meanwhile, is forcing U.S. newspapers to cut budgets and jobs. The Tampa Bay Times, owned by the nonprofit Poynter Institute, intends to eliminate 50 jobs by June to cover the $3.5 million in additional newsprint costs each year.

Small-town and rural newspapers, which typically operate on thin margins, are especially vulnerable to the tariffs. If they close shop, readers in many of those communities will be left without a watchdog to monitor local governments and protect against corruption.

The Press Democrat buys paper from U.S.-based sources, but the price has increased significantly since the tariffs on imported newsprint took effect.

The Commerce Department and the International Trade Commission are reviewing the tariffs to decide if they should become permanent, but final decisions are months away. Quicker action is needed to prevent further loss of jobs at newspapers, magazines, book publishers and printers.

Sen. Susan Collins, a Republican, and Sen. Angus King, an independent, both from Maine, have introduced legislation that would suspend the tariffs for 90 days while the Commerce Department evaluates the effects. “As a senator representing one of our nation's leading papermaking states, I have consistently fought for actions to ensure a level playing field for the domestic papermaking industry,” Collins said. “In this case, however, one domestic mill owned by a venture capital firm appears to be taking advantage of trade remedies to add to its own bottom line, putting thousands of American jobs at risk.”

California's congressional delegation should line up with Collins and King. These tariffs fit a pattern of rash decisions from the White House about trade matters. The administration appears to be rethinking tariffs on European steel and aluminum, as well as its approach to NAFTA and trade with China. Congress has an obligation to ensure better-informed, less-impulsive decisions are also made about tariffs that will have drastic consequences for newspapers and their readers.

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