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Tariff battle makes the local news

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From the Sonoma Index-Tribune:

“All the news that’s fit to print” is the well-known tagline of the New York Times. Unfortunately, that could soon translate to “a lot less news” — or in some cases “no news at all” — if a single West Coast newsprint manufacturer gets its way.

North Pacific Paper Co., a paper mill in Washington state, claims to produce about 750,000 tons of paper a year, from copy paper for homes and offices to publishing stock for newspapers and magazines. But with the growing trend to go “paperless,” companies like North Pacific, or NORPAC, have seen demand plummet over the last decade. And the rise of digital media, on both the advertising and editorial sides, has equally depleted the call for newsprint, sales of which are down a whopping 75 percent since 2000.

It’s a stark contrast to the paper scene north of the U.S. border, where forest-rich Canada is now the largest exporter of newsprint in the world.

Casting an enviable eye on its lower-priced competitors to the north, NORPAC, which was purchased in 2016 by a New York-based hedge fund called One Rock Capital Partners, lobbied the U.S. Department of Commerce last August to tighten the screws on the import of newsprint from Canada, which it claimed was flooding the U.S. market with below-market-rate newsprint.

Of course, one company’s idea of “below-market-rate” is everyone else in the print industry’s “new market rate,” as industry changes over the course of many years have lowered demand for the paper product and, hence, the price of supply should follow.

But tariffs are the all rage in Washington, D.C., as of late, and last month the Commerce Department placed a “countervailing and anti-dumping” duty on newsprint from Canada, alleging some companies were underpricing their newsprint by as much as 22 percent. The result could mean an increase in the cost of newsprint by as much as 32 percent – a major dilemma for many newspapers, which usually count the cost of newsprint as their biggest expense after personnel.

In December, more than a dozen members of Congress signed a letter to Department of Commerce Secretary Wilbur Ross to express their “deep concern” over the planned tariff on “uncoated groundwood paper” – which is what newsprint is made from – and to “consider the negative impact it would have on U.S. newspaper and commercial printing industries.”

The letter blasted NORPAC as an outlier “with no additional pulp or paper operations in the U.S. or globally” – pointing out that such “interference in the market” would be to the benefit of the 260 employees at NORPAC, at the expense of the 600,000 working at newspapers and commercial printers.

“Notwithstanding the decline in demand, people in small towns all over America still depend on their local newspapers,” the letter read. “These petitions threaten to put those newspapers out of business and cut off rural and small-town American from their local news.”

We’d advise caution to those who are suggesting the newsprint tariff is part of President Trump’s war on quality journalism – it’s a stretch to imagine he’s versed in newsprint price indexes, let alone what uncoated groundwood even is. However, it remains a testament to his administration’s penchant for the type of folly and recklessness that comes when economic policy is set through impetuous flights of fancy and shifty score settling.

We don’t wade into the national tariff waters cheerfully. Nor do we expect others to lose sleep over cost adjustments to our uniquely democratic institution.

But we do think our readers — in fact, anyone who values the societal benefits of a free press – should have serious misgivings when a hedge-fund company buys its way into the printing business and tries to destabilize an already precarious market in an industry so valuable to so many.

Share your misgiving with Rep. Jared Huffman at 202-225-5161.