U.S. goes ahead with tax on Canadian newsprint

FILE - In this April 11, 2018, file photo, production workers stack newspapers onto a cart at the Janesville Gazette Printing & Distribution plant in Janesville, Wis. The U.S. Commerce Department is going ahead with a tax on Canadian newsprint, a threat to the already-struggling American newspaper industry. The tariffs unveiled Thursday, Aug. 2, are mostly lower than those originally announced earlier this year but would still impose an anti-dumping border tax as high as 16.88 percent. (Angela Major/The Janesville Gazette via AP, File)

WASHINGTON (AP) -- The U.S. Commerce Department is going ahead with a tax on Canadian newsprint, a threat to the already-struggling American newspaper industry.

The revised tariffs unveiled Thursday are mostly lower than those originally imposed earlier this year. But they would still hit the paper used by newspapers and other publications with an anti-dumping border tax as high as 16.88 percent.

The tariffs are a response to a complaint from a hedge fund-owned paper producer in Washington state, which argues that its Canadian competitors are taking advantage of government subsidies to sell their product at unfairly low prices. Still, Commerce decided to spare two Canadian producers from the antidumping charges.

In addition to antidumping duties, Commerce is imposing newsprint levies ranging from 0.82 percent to 9.81 percent to counter Canadian subsidies.

The Commerce decision is not final. The independent U.S. International Trade Commission could change or kill the tariffs in a ruling scheduled for next month.

Newsprint is usually the second-highest cost for newspapers. Already contending with falling readership and plummeting advertising revenue, newspapers are struggling as the tariffs drive up the cost of newsprint.

The Robesonian newspaper in Lumberton, North Carolina, for instance, last week announced that it was dropping its eight-page color comics sections from its Sunday edition to cut costs.

"Readers in our towns will welcome the news that their local newspapers are in a little less in jeopardy from devastating tariffs," said Susan Rowell, president of the National Newspaper Association and publisher of the Lancaster News in South Carolina. "We appreciate the Commerce Department's more careful review of the paper markets. But this use of trade laws to weaken our economies still puts communities at risk of losing their local newspapers."

Other papers have turned to layoffs to help offset the additional costs of newsprint. The Tampa Bay Times announced in April it would lay off about 50 employees in response to a potential $3 million annual cost increase.

This decision will make our jobs harder, in part because we know we will be able to employ fewer people to do those jobs," said Alfredo Carbajal, president of the American Society of News Editors.

Congress is overwhelmingly opposed to the tariffs on the paper used by newspapers and other publications.

House Speaker Paul Ryan contacted Commerce Secretary Wilbur Ross directly to voice his concerns. Senate Minority Leader Chuck Schumer declared in a newspaper column that the tax "would do irreversible harm" to the newspaper industry.

The tariffs are a response to a complaint to the Commerce Department from the North Pacific Paper Company. The company's CEO, Craig Anneberg, said that since the imposition of the current tariff rates, the market has stabilized to the point the company has been able to hire 60 new employees and is working to hire 40 more.

Chrystia Freeland, Canada's minister of foreign affairs, said that despite the slight reduction in some duties, "Canada remains disappointed with the final duty rates" announced by the Commerce Department.

"For decades, U.S. publishers and printers have relied on fairly and competitively priced imports of Canadian newsprint," Freeland said.

She added that the Canadian government will work with the forest industry and nearby communities to "defend this vital sector and help diversify its trade with new international markets."

AP Economics Writer Martin Crutsinger contributed to this report.