Trade commission halts tariffs that crippled U.S. newspaper industry

A federal agency on Wednesday unanimously voted to halt a series of tariffs that drove up the cost of newsprint, the coarse wood pulp-based paper that is one of the chief commodities and expenses for the struggling newspaper industry.

The International Trade Commission by a 5-0 vote found the five American newsprint producers haven’t been harmed by Canadian imports. The decision nullified a series of tariffs imposed earlier this year by the U.S. Commerce Department on those imported products.

U.S. Rep. Cathy McMorris Rodgers was one of 19 members of Congress to speak against the tariffs on Tuesday, telling the commission that Washington State has three of the five remaining newsprint mills in the U.S. She expressed concern about the damage to businesses as a result of the “misguided” tariffs.

According to information provided by paper supplier Lindenmeyr Central, the number of newsprint mills in North America dropped from 147 in 2000 to 34 in 2018. Of those, only five remain in the United States; the rest operate in Canada.

Three of the remaining five U.S. newsprint producers are based in Washington state. That number includes Millwood-based Inland Empire Paper Co.,a subsidiary of Cowles Co., which also publishes The Spokesman-Review.

Inland Empire Paper sends its products all over the country, but most customers are west of the Mississippi River, said Stacey Cowles, Spokesman-Review publisher and Cowles Co. president.

“We saw prices start to go up last year before the tariffs,” he said. “I’ve been hearing from industry people that the supply is pretty tight.”

Although the news industry applauded the ruling, it may not immediately help newspapers, which rely on printed products for much of their revenue.

“Newspaper publishing is still a tough business, but this is a good day, not just for newspapers but for the communities that depend on us as a civic asset,” Paul C. Tash, chief executive of the Tampa Bay Times, told the Washington Post.

Earlier this year, Tash eliminated 50 jobs to offset higher newsprint costs. “This doesn’t make all the challenges go away, but at least this challenge has been dispensed,” he said.

And the Pittsburgh Post-Gazette announced last week that it would cut its print edition from seven days a week to five, eliminating Tuesday and Saturday publication. Editor David Shribman said the change was in the works for some time, saying: “We are emphasizing digital because the market is going digital.” But he added, “These tariffs aren’t helping us.”

The impact of the tariffs has been felt in nearly every newspaper market across the country, adding to existing disparities between costs and revenues. On Wednesday, The Spokesman-Review informed employees that it intends to reduce its newsroom staff by five positions.

Cowles explained the Millwood plant charges The Spokesman-Review the same rate it does all customers, even though both businesses are owned by the same company.

“Through business ethics on the mill side, we charge the same, fair price to all of our customers,” Cowles said. “We set a price that reflects our volume and proximity.”

The tariffs were imposed by the Commerce Department earlier this year in response to a petition filed by the North Pacific Paper (NorPac), a mill operator based in Longview, Washington. NorPac executives claimed Canadian competitors were hurting American manufacturers by dumping their products below cost on the U.S. market, an unfair trade practice.

A Commerce Department investigation found in NorPac’s favor, and the department began imposing higher duties on Canadian products in January. Since most of the newsprint plants operate in Canada, the tariffs caused newsprint prices to increase as much has 30 percent in the U.S.

Newspapers responded by cutting staff and consolidating news sections.

The International Trade Commission, an independent federal agency, was charged with determining whether NorPac had been harmed by the trade practices as found by the Commerce Department. The agency’s five commissioners voted “negative” in rapid succession on Wednesday, thereby vacating the tariffs.

In a statement, NorPac’s chief executive, Craig Anneberg, said: “We are very disappointed in the USITC’s negative determination, given that the record clearly shows that the domestic industry has been materially injured by dumped and subsidized imports from Canada. We intend to review the USITC’s written determination when it is issued in a few weeks, and we will assess our options at that time.”

The Washington Post contributed to this story.