PLATTSBURGH | An escalating trade dispute between the U.S. and Canada has newspaper leaders rattled over a new tariff that may drive up costs for an already struggling industry. 

The U.S. Department of Commerce issued a preliminary decision on Tuesday to impose tariffs on the newsprint used by newspapers and book publishers nationwide.

The measure, which would impose tariffs of up to 10 percent of the import of uncoated groundwood paper from Canada, is a result of a petition brought before the International Trade Administration by the North Pacific Paper Company (NORAC) in 2017. 

“What the U.S. uncoated groundwood papers industry wants is a level playing field, and this decision is an important step forward for American producers, workers and their families that have been the victims of unfair Canadian trade practices for too long,” said NORAC CEO Craig Anneberg in a statement.

The Washington-based company claims Canadian paper is cutting into their business, and that the country’s newsprint was unfairly subsidizing its industry at home.

“Today’s preliminary decision allows U.S. producers to receive relief from the market-distorting effects of potential government subsidies while taking into account the need to keep groundwood paper prices affordable for domestic consumers,” said U.S. Commerce Secretary Wilbur Ross in a statement. 

Enforcement of U.S. trade law is a prime focus of the Trump administration, and antidumping and countervailing duty investigations by the U.S. Commerce Department have risen 52 percent in the past year.

‘STUNNED’

The decision may lead Canadian newsprint manufacturers to boost prices. 

The print sector quickly mobilized and vowed to fight what it says will likely will lead to job losses in the publishing, commercial printing and paper industries, which employ 600,000 people nationwide.

Many publishers argue they’re ill-equipped to absorb the unbudgeted costs, and are already struggling with declining advertising and subscription revenues. 

Fees may also be raised for readers — while other small-town papers may see their paper-thin margins narrowed even further, jeopardizing their existence.

“We are stunned that a single U.S. mill in Longview, WA 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,” said News Media Alliance President and CEO David Chavern in a statement.

News Media Alliance (NMA) represents about 2,000 newspapers nationwide. 

NORAC employs just 260 people at just one mill, said NMA, who called blasted the company as an “outlier” owned by a New York-based hedge fund operator.

While its owners are now seeking protection through trade sanctions, the majority of the U.S. newsprint manufacturers — as well as the national trade association for the U.S. paper industry and their customers — oppose this move, Chavern said.

More than 10 American mills have closed since 2012, costing approximately 2,150 jobs, reducing the U.S. groundwood paper industry’s production capacity by nearly 70 percent, according to NORAC.

During this time, U.S. producers’ share of the American market has decreased from 60 percent to 36 percent. 

But Chavern argued NORAC doesn’t understand the market.

Neither the U.S. or NORAC have lost market share to Canadian imports from 2014-2016, he countered, and that more uncoated groundwood capacity was eliminated in Canada than in the U.S. 

“While capacity fell, so did Canadian exports to the United States,” he said.

“Now, we will all literally pay for one manufacturer’s manipulation of our country’s trade laws. There will be no winners.”

LOCAL IMPACTS

Newspapers have lost roughly 30 percent of their print subscriber base over the past decade, according to the New York Press Association.

The decline is not due to unfair trade, but rather a decade-long shift from print to digital, Chavern said, and the new duties may hasten the industry’s downturn.

Sun Community News is among the local newspapers that will be impacted.

“It’s not a matter of choice, it’s something we have to live with,” said Publisher Dan Alexander. 

Alexander declined to disclose exact numbers, as the Elizabethtown-based newspaper company is still evaluating the new details.

But the cumulative increase to print costs when paired with two previous tariff increases will be about 15 percent, he said.

Bloomberg reported a metric ton of newsprint cost about $570 as of Dec. 26, according to FOEX Indexes Ltd., a provider of global pulp and paper data.

“The good thing for our readers is we don’t charge them for the paper, so this is a cost we’re going to have to absorb, which we are in a position to do right now as a result of the strong advertising support we are receiving from the community​,” Alexander said.

The U.S. Department of Commerce placed an overall tariff of 6.53 percent on about 25 Canadian plants, mostly in Quebec and Ontario, according to CBC News.

Alexander noted the final tariff isn’t set in stone, and the U.S. Commerce Department will make another decision this spring before making a final decision in May. 

“​​If an arrangement is agreed upon, publishers might realize a refund​, so we don’t want to act hastily,” Alexander said. 

Anneberg said he understands the concerns by newspaper publishers, but strongly disagrees with the notion that their industry requires “low-priced, government-subsidized, imported newsprint from Canada to sustain its business model.”

“High-quality journalism in communities across the country should not depend on unfairly traded inputs that cause material injury to a U.S. industry and American jobs,” Anneberg said. “We estimate the impact this ruling would have on the cost to produce the average printed newspaper would be less than 5 cents per newspaper – a small price to pay to preserve American manufacturing jobs.”

The U.S. International Trade Commission will be asked to rule on the two measures in August.

U.S. Customs and Border Protection will begin collecting estimated countervailing duties for Canadian newsprint imported on or after approximately Jan. 16, according to the NYPA. 

“While we are disappointed, we have heard that our advocacy made a significant difference in minimizing the levels of duties in this round,” said NYPA Executive Director Michele Rea in a memo to members. 

More efforts are planned to combat the measure, she said. 

The next round in the preliminary stage is for Commerce to assess “antidumping” duties, which will be announced “on or around” March 8. 

STEFANIK SPEAKS OUT

A coalition of federal lawmakers has spoken out against the new duties, including U.S. Reps. Brian Higgins and Elise Stefanik, who issued a joint statement on Thursday citing concerns over costs for consumers and potential job cuts for employees of newspaper and book publishers.

“My district is home to a thriving local press corps that would be unfairly burdened by these costs, harming local journalism and the families across my district that rely on these important organizations,” said Stefanik in a statement.

Higgins said local reporting is “the core of our communities’ access to information about government, the economy and community activities and it should not be infringed upon by the claims of a single U.S. producer.”

Stefanik and Higgins joined a bipartisan coalition of 34 House members and 8 U.S. Senators asking the U.S. Commerce Department to “carefully investigate the issue, and consider the negative impact the decision would have on the U.S. newspaper and commercial printing industries, as well as the overall U.S. paper manufacturing industry.

“Our North Country economy relies on strong trade with our Canadian neighbors and these proposed duties would harm the many businesses that rely on these paper products,” Stefanik said.

The American Forest and Paper Association, which represents the broader domestic paper industry, also opposes the measure. 

North Country Chamber of Commerce President Garry Douglas called the tariffs “the latest example of a failure to understand our own interests in the context of the U.S.-Canadian economic partnership.”

“We need to stop shooting ourselves in the foot by treating Canada like China,” Douglas told The Sun in an email. “Our economic partnership with Canada is the single greatest force in the North Country economy and holds our greatest opportunities for the future.”

Canadian officials, too, have spoken out. Foreign Affairs Minister Chrystia Freeland and Natural Resources Minister Jim Carr have called the duty rates “unjustified,” CBC News reported. 

“Any duties will have a direct and negative impact on U.S. newspapers, especially those in small cities and towns, and result in job losses in the American printing sector,” the ministers said in a statement.

The spat marks the latest in a growing rift between the two neighbors, joining protectionist trade policies against milk and dairy imports as a chief dispute affecting producers in New York state.





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