Tariff on Canadian newsprint could put some newspapers out of business
Recently imposed tariffs on Canadian newsprint could close the doors of smaller newspapers and reduce the coverage of local news across the state — and the country — because of a complaint filed by a hedge-fund owned paper producer in Washington state.
South Carolina Press Association Executive Director Bill Rogers said North Pacific Paper Co. petitioned the U.S. Department of Commerce to impose the tariffs, saying the imported paper was harming the country’s newsprint industry.
“But that’s not really the facts,” he said. “NORPAC is not acting in the best interests of the newspapers or the paper industry, they’re just acting in their own interest.”
Rogers said U.S. paper companies don’t produce enough newsprint for the U.S. market and Canadian paper has always been a viable option to help meet the needs of the newspapers. With a decline in print advertising the past decade, there’s no incentive for additional U.S. paper producers to open up shop.
Revenue from digital ads has increased steadily, according to a Pew Research Center study showing it accounts for nearly one third of total revenue for papers in the study, but that's not enough to sustain newspapers trying to maintain a strong print product while growing an online presence.
“No company’s going to start a new mill, and even if they did, it would take a long time to get it up and running – you don’t just throw those things up overnight,” Rogers said said. “Even if there was an incentive to do it, which there isn’t, it would take a long time to get it on line.”
In January, the price for Canadian paper producers to export into the U.S. rose by about 6.5 percent. That cost increased to 22 percent in March, and Rogers said it could climb as high as 32 percent.
“That’s a game changer," he said.
"It’s going to affect every newspaper in South Carolina. Some of the smaller papers might not be able to make it. They might fold. The bigger papers may cut pages or days. It could mean staffing cuts and newspapers have already had staffing cuts. This is a danger to the newsprint industry in South Carolina and across the country.”
National Newspaper Association President Susan Rowell said the tariffs are the biggest issue community newspapers have ever faced and will affect the coverage of local news throughout the nation.
“Not only are we looking at having to increase the cost of the product, we need to get our message out to readers. We’re having issues with even getting newsprint,” she said. “This is what we supply to our readers in order for them to get the information in our communities.”
William Moore, publisher of The Press and Standard in Walterboro, said the cost to print his weekly newspaper has skyrocketed. His printer is raising its rates because its major newsprint supplier has incurred duties and penalties of over 32 percent since January.
“These costs are passed along to me; so I’m paying a penalty," Moore said.
"And I have no doubt we will see additional increases,” Moore said. “Printing is one of three major expense categories for newspapers. The others are distribution and personnel. Publishers have no choice but to cut costs in these areas. This is not good for our employees or the communities we serve.”
Local manufacturer: Don't reduce demand
York County's Resolute Forest Products in Catawba is the largest North American producer of uncoated groundwood paper, the grade typically used by newspaper publishers. The company employs nearly 500 people in mills that manufacture newsprint throughout the country.
Resolute manufactures newsprint in the U.S. at its mills in Grenada, Miss., and Augusta, Ga., and at a partnership mill in Usk, Wash. It also manufactures newsprint in Canada at five mills located in Ontario and Quebec. Resolute sells newsprint to over a dozen South Carolina newspaper publishers.
Debbie Johnston, Resolute Forest Products U.S. public affairs director, said there’s currently not enough newsprint produced domestically to fill the needs of U.S. publishers and printers.
“We believe the growing scarcity and increased cost of this paper will only drive current printers and publishers in the U.S. to reduce costs by cutting back on printed material or production schedules, or closing their doors altogether and accelerating the transition of printed material to a digital format,” Johnston said.
She said consumers who may not have access to computers or the Internet lose their ability to access information and news, and they lose the benefit of receiving local news from their community newspaper.
“All of this will result in a decrease in the demand for paper, which of course is a grave concern to paper producers like Resolute,” Johnston said.
Although more readers are getting their news online, prints still serves as the backbone of most newspapers’ budgets.
“Currently, digital is not replacing print revenues,” Rowell said. “I can’t see where it will ever replace print revenues. So if you don’t have the revenue, how do you provide the resource?”
Rogers doesn’t think weeklies in rural areas can absorb a 32-percent increase on paper, the most expensive item in their budget.
The South Carolina Press Association sent a letter to the U.S. Department of Commerce director, urging him to reconsider the tariffs – all 99 members of the association approved the letter.
“It’s going to take all of us working together to contact Congress to get our message to Washington,” Rowell said. “(Community newspapers) play a very important role in the community – we are the community.”
At least two members of the state's congressional delegation are showing interest.
Last December, U.S. Rep. Ralph Norman, (R-Rock Hill), sponsored a letter to the U.S. Department of Commerce Secretary Wilbur Ross and U.S. Trade Representative Robert Lighthizer urging them to “consider the negative impact that any trade remedy would have on the U.S. newspaper and commercial printing industries, as well as the overall U.S. paper manufacturing industry.”
Signed by 34 House members, the letter stated that the U.S. newspaper publishing and commercial printing sector employs over 600,000 people across the country compared to roughly 260 NORPAC employees.
“Uncoated groundwood paper demand is in steady decline in both the U.S. and Canada. It is market erosion, not unfair trade, causing today’s competitive turmoil and job losses in the newsprint and commercial printing sectors,” the letter states. “When Commerce issues preliminary determinations in the new year, it should protect hundreds of thousands of jobs and the local news lifeline of rural and small-town America by rejecting trade sanctions on uncoated groundwood paper.”
Michele Exner, spokeswoman for U.S. Senator Tim Scott (R-Charleston), said “Senator Scott is encouraging the Commerce Department to look very closely at the negative effects this tariff could have on local economies and newspapers across the country. As the Trump administration continues their efforts to rework different parts of our trade policy, the Senator will remain engaged and working for the best interests of South Carolina."
Stephanie Jadrnicek: firstname.lastname@example.org