Tariffs threaten hometown newspapers

In case you have not heard, there is a tariff that is making it’s way into the newspaper industry. This will have a detrimental effect on all newspapers large and small, including your home town publication, the Portageville Missourian.

The newspapers industry is at risk in an environment where government turns a blind eye to the devastating impact of newsprint tariffs.

Here is what is happening. In the wake of January’s announcement from the U.S. Department of Commerce that it would begin imposing stiff tariffs on Canadian newsprint. Across the country, newspapers of every size are being forced to cut costs to survive price hikes of up to 32 percent.

Newsprint for decades has been among the biggest expenses for newspapers — usually second only to payroll. And Canadian newsprint throughout that period has been the leading source of paper to U.S. publishers.

Profit margins in both the paper milling and publishing businesses have been under stress since the recession and the rise of the digital revolution. No one was looking to add to that stress — except for a single opportunistic U.S. newsprint supplier in Washington state.

North Pacific Paper Co., or NORPAC, petitioned Commerce last August requesting it impose tariffs on Canadian suppliers. NORPAC contended paper mills across the border were receiving unfair advantages from their government and dumping cheap paper on the U.S. market.

These arguments, however, run counter to the interests of U.S. consumers and the rest of the U.S. newsprint industry, which has not sided with NORPAC. The truth is pricing of newsprint has much more to do with consumer demand, industry capacity and market logistics particular to paper.

U.S. demand for newsprint has fallen by 75 percent since the 1990s. Mills in both countries have closed and no one is looking to invest hundreds of millions of dollars in building a new mill. Plus, Canadian mills have natural advantages over U.S. suppliers due to access to hydroelectric power and closer proximity to many U.S. cities.

The result is the U.S. newspaper industry has two sources for newsprint, but the U.S. mills are in no position to step up and serve America’s newspapers if Canadian newsprint is artificially priced out of the market.

One other important consideration: Even as local newspapers transform to serve readers and advertisers across a variety of digital platforms — many are showing strong results for their efforts — this is a work in progress. Newspapers still get the majority of their revenues from ink-on-paper products.

Tariffs in this instance do not create or protect U.S. jobs. Rather, if they are allowed to stand following later reviews this this month, they put new pressures on newspapers and imperil services to local readers and advertisers.

Additionally, with the aluminum tariffs, this is taking affect on aluminum printing plates that most newspapers use. One of the main suppliers has increased their costs five percent. So we are getting it from both ends.

What can you do? Call your US Senators, and Congressman. Subscribe to your local newspaper, and help support the economy. When you see me out selling ads, not only for the revenue, but for survival of your local publication.