FARGO – “Devastating” is how Lisa Hills, executive director of the Minnesota Newspaper Association, described the potential impact of tariffs the Trump administration has imposed on Canadian newsprint.
That’s the paper used to print newspapers.
Hills said printing costs are the second-highest expense for newspapers behind labor.
The North Dakota Newspaper Association (NDNA) is also sounding the alarm, as are many newspapers around the country. Forum Communications Co. is a member of both state newspaper groups.
The industry, through the Stop Tariffs on Printers & Publishers (STOPP) coalition, said more than 600,000 jobs are at risk. These include not just the newspaper industry, but its suppliers.
Unlike other tariffs in the news these days, this one started with a single company.
The North Pacific Paper Co., based in Washington state, complained last year to the U.S. Department of Commerce that Canadian uncoated groundwood paper was unfairly subsidized. In January, the department agreed to impose preliminary tariffs of 4.42 to 9.93 percent depending on the paper mill and the amount of subsidy it received. In March, the department added tariffs ranging from 0 to 22.16 percent, depending on the mill.
That means the new tariff on some newsprint could be as high as 32 percent.
The first tariff may be made permanent on May 22 and the second tariff may be made permanent on Aug. 2, depending on how the department’s investigation turns out.
North Pacific argues that more than 2,000 jobs have been lost since 2012 because of Canadian subsidies. STOPP said it’s actually because the newspaper industry, weakened by changes in advertising revenue brought by the Internet, has bought less newsprint.
“While we understand the concerns recently surfaced by some newspaper publishers, we strongly disagree with the notion that their industry requires low-priced, government-subsidized, imported newsprint from Canada to sustain its business model,” North Pacific CEO Craig Anneberg said in a news release.
STOPP noted that his company is the only one complaining.
For now, the impact of the new tariff appears limited. Industry insiders The Forum spoke with haven’t heard of any newspaper closing or suffering serious financial hardships as a result.
NDNA Executive Director Steve Andrist said some of his members have told him about increasing printing costs – many smaller newspapers contract with a printing company rather than do it in house – and there’s concern about the supply of paper.
Matt McMillan, Forum Communications’ vice president for newspapers, said readers can expect to see slightly lighter-weight pages in their newspapers in a couple of months, a cost-saving move by paper mills. Customers that get both a newspaper and a free shopper from Forum Communications may, in the future, get just one, he said.
More drastic moves, such as raising subscription rates, are possible but haven’t been considered, he said.
Forum Communications buys newsprint, by way of a buying cooperative, from companies with mills in Canada as well as the U.S., he said. Mills are located primarily where there is a plentiful supply of pine trees, he said, which means Canada and Georgia, but U.S. paper mills alone don’t have the capacity to supply all U.S. newspapers.
Art Hagebock, who owns and prints the LaMoure (N.D.) Chronicle and four other newspapers, said he doesn’t yet know what the impact will be. He said he buys a year’s supply of newsprint at a time and won’t have to buy again until next spring, when he could face the tariff.
Being an NDNA member, he said he agrees with the group’s position. “As a group we probably should oppose (the tariff) because down the line it’s going to cost us more. But if you’re asking me how it’s affecting me right now and anybody else, I don’t think it’s affecting us right now.”
The Constitution gives Congress the power to regulate foreign trade, but that power was delegated more and more to the executive branch following the devastating trade war that Congress ignited with the Smoot-Hawley Tariff of 1930. This means Congress can override the Trump administration if it chooses.
McMillan said STOPP is hoping to convince enough members of Congress to make that happen. The problem is it could take a long time, six months to a year or more, he said.
Hills said her members are starting to learn about the issue now. “They’re scared. I haven’t heard a lot of people who have a great deal of confidence that this will get worked out.”
“It’s more difficult to make newspapers profitable these days because of the change in where the advertising revenue is going,” Andrist said. “Any additional costs right now, especially one like this that’s significant, could significantly affect their cost. It’s very difficult to find an offsetting source of revenue for that.”