Newsprint costs to rise as U.S. imposes tariffs on Canadian paper makers
As if the U.S. newspaper business didn't have enough trouble coping with decades of lost readers and advertising dollars, an escalating trade dispute with Canada is making every edition cost a lot more to publish starting this week.
The U.S. is imposing preliminary countervailing duties of 15 to 25 percent, said Kevin Mason, managing director Vancouver-based ERA Forest Products Research.
Canada, with its vast forests and timberland, is the world's biggest maker of newsprint and the U.S. is its top customer. But North Pacific Paper Co., a producer in Longview, Washington, filed a trade complaint alleging Canada subsidizes its industry, giving companies like Montreal-based Resolute Forest Products Co. an unfair advantage in preserving a dominant market position.
After 18 months of relatively stable newsprint pricing, the industry already had been hit with three price increases in a short period: The first was a 5 percent increase on Oct. 1, then 2.5 percent Dec. 1, and another 2.5 percent two weeks ago.
Now they'll increase further after the Department of Commerce added the tariffs starting Tuesday.
America's northern neighbor accounts for about three quarters of what gets used in the U.S., from The Wall Street Journal to local newspapers, including the Daily Herald.
The tariffs vary among the half-dozen affected manufacturers, The Holland Sentinel reported.
The higher costs will squeeze U.S. newspapers already coping with 28 straight years of declining circulation and increased competition from the internet.
Many publications have closed as print-advertising revenue plunged 80 percent since 2005.
The New York Times Co. alone spent $72 million last year on newsprint, or 5 percent of operating costs.
But the biggest impact may be at the hundreds of smaller papers with fewer financial resources.
"It could have a catastrophic impact on community journalism," said Matt Davison, the publisher and president of the Idaho Press-Tribune, which publishes six days a week and has a circulation of 15,000 in Nampa, about 20 miles west of Boise.
Industry representatives had urged Commerce Secretary of Commerce Wilbur Ross to reject the petition by North Pacific to investigate Canadian imports of "uncoated groundwood paper," the grade of paper widely used by newspapers and other commercial publishers, the Sentinel reported.
"We are stunned that a single U.S. mill in Longview, Washington, has been able to manipulate the trade laws to their gain, while potentially wreaking financial havoc on newspapers and other commercial publishers across the country," the News Media Alliance said in a statement last week.
"This decision and its associated duties likely will lead to job losses in U.S. publishing, commercial printing and paper industries," said the Alliance, which represents more than 2,000 U.S. news organizations.
The Alliance said the petition by North Paper "does not reflect the views of the domestic paper industry and demonstrate a lack of understanding of the market."
"This is really egregious," said Seth Kursman, a spokesman for Resolute Forest Products, the world's largest newsprint maker. "This is one company. The entire U.S. domestic industry is against them."
It's not just newspapers that will be affected. Costs will rise for all kinds of commercial printers and publishers, according to ERA Forest Products Research.