OP-ED: Newsprint tariff will harm newspaper industry
Rolls of newsprint

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OP-ED: Newsprint tariff will harm newspaper industry

Story By: NICOLE FUENTES
1/18/2018


 

Thanks to the North Pacific Paper Co., a single mill based out of Washington State filing a petition claiming Canadian mills are selling newsprint under value, printers and publishers can expect countervailing and antidumping duties as soon as this week — adding as much as 10 percent to the cost of newsprint.

According to the News Media Alliance, the Department of Commerce on Jan. 9 released a preliminary determination placing countervailing duties on Canadian imports of groundwood paper, which is used to make newsprint, books and directory papers. The duties correspond with the department’s preliminary findings of subsidies provided by the Canadian government to Canadian manufacturers. 

Canada is the largest exporter of newsprint in the world, with over 25 plants. Earlier this month, the Canadian government claimed the duties are unjustified. But still, preliminary duties will be placed on the following Canadian mills: Resolute, 4.42 percent; Catalyst, 6.09 percent; Kruger, 9.93 percent; White Birch, 0.65 percent (de minimis), and all others, 6.53 percent. 

U.S. Customs and Border Protection will begin collecting estimated countervailing duties for Canadian newsprint imported on or after Jan. 16. Importers will be the parties responsible for paying the duties. However, if either Commerce or the U.S. International Trade Commission reverses their findings in a final determination, all collected duties will be refunded to the importers. 

Paul Boyle, senior vice president of the News Media Alliance, explained that the petitioner is an outlier, owned by a New York hedge fund operator with no additional pulp or paper operations in the United States or globally. Some, he said, speculate that it could be part of the Trump Administration’s effort to hurt the media industry.

However, according to trade law, it is illegal for a country to sell a product in the U.S. under value. Still, he said, implementing tariffs to essentially level the playing field would hurt the domestic paper industry.

Publishers and commercial printers, he said, cannot absorb newsprint tariffs. The tariffs would only force publishers and printers to cut costs and likely lead to more job losses. “This is not the result intended by U.S. trade law,” Boyle explained.

In addition to Canadian manufacturers and NORPAC, there are two newsprint mills in Georgia, Mississippi and another mill in Washington. “The important thing to remember,” he continued, “is that no other manufacturer supports this petition.”

NORPAC, he said, is the only mill seeking government protection through trade sanctions, and the majority of the U.S. newsprint manufacturers, as well as the American Forest and Paper Association, the national trade association for the U.S. paper industry, as well as their U.S. customers, oppose this move.

“The demand for newsprint has been in a steady decline in the U.S. The reason is not unfair trade but a well-documented decline in the newspaper industry,” said Boyle. “The ITC’s preliminary report recognized that ‘newsprint tends to be supplied by producers in that region,’ and pricing reflects the regional marketplace,” he added, meaning that despite prices, sale reflects regional convenience.

The report, he said, also showed that almost 91 percent of Canadian newsprint comes into the Midwest and Northeast, and only 4.6 percent enters NORPAC’s region, the Northwest.

According to Michelle K. Rea, executive director of the New York Press Association, publishers can expect some level of duties but have heard the advocacy has made a significant difference in minimizing the levels of duties this round. 

The next round, she said, is for the Department of Commerce to assess “antidumping” duties, which will be announced on March 8.  These duties will be added on top of the countervailing duties.

Adding insult to injury, she said, the Postal Regulatory Commission also approved a postal rate increase, which takes effect Jan. 21.  Periodical rates will increase 1.84 percent. 

Members of Congress have since gone on record expressing opposition to the duties. Letters signed by 34 members of the House of Representatives and eight members of the U.S. Senate have already been sent to Commerce Secretary Wilbur Ross. Rep. Lee Zeldin also commented on the subject. “Free trade must be fair trade and protect jobs, consumers and businesses on Long Island,” he said. When asked if he would oppose the tariffs on newsprint, Zeldin’s spokesperson said there are multiple investigations going on right now at different stages, and it would be impossible to comment on determinations that have not yet been made. “This is definitely an important issue to closely monitor as it continues through this process,” the spokesperson wrote in an email. 

The News Media Alliance is requesting the Commerce Department to scrutinize NORPAC’s petition and for members of Congress to express their concerns. 

Please help protect the future of newspapers by telling the Department of Commerce or your U.S. Congressional representative, Lee Zeldin, that you oppose the newsprint tariff. For more information, contact the News Media Alliance at 571-366-1150.