Trump's Trade War on Newsprint, Proposes 32 percent Anti-Dumping Duties on Newsprint from Canada

Trump's Trade War on Newsprint, 

A trade war over Canadian newsprint sounds like one from the history books, not the digital age. But it's happening right now and stands to hurt American consumers and cost American jobs.

President Donald Trump has been playing politics with free trade, threatening international pacts and pandering to specific American industries, most notably steel and aluminum. Now his administration is picking a needless fight with Canada that has raised the cost of raw paper dramatically and threatens to disrupt imports to American publishers. We're following this spat closely because the Chicago Tribune spends millions annually on newsprint.

Yet there's also more at stake than newsprint supplies — it continues an attack by a trade-phobic White House on the wisdom of free markets and global competition. This is just the sort of protectionist measure that the Tribune, through its 170 years, has been exposing as economically self-defeating for America. If this were a dispute over Canadian widget imports that hurt widget-dependent companies and consumers in Chicago, we'd be just as alarmed.

We're concerned, too, about getting Tribune print readers their daily paper at a fair price if this dispute is not resolved. Some small-town newspaper publishers, already pushed to the wall by Internet competition, could be driven out of business.

Here's the background: The U.S. Commerce Department, which says Canadian paper producers are harming American competitors, has proposed adding anti-dumping duties of up to 32 percent on newsprint and some other paper products from Canada. The claim is that these imports to the U.S. benefit from unfair Canadian government subsidies. But U.S. publishers say the Trump administration is misreading the marketplace, and using government power to benefit a single paper mill owner in Washington state.

“What we're seeing with the newsprint tariffs is not a government acting to try to better the economy for its citizens,” wrote David Chavern, president and CEO of the News Media Alliance, an industry group. Instead, that one Washington company, North Pacific Paper (aka Norpac), is “looking to use the U.S. government to tax local and community newspapers across the United States in order to bolster their own bottom line.”

Last year Norpac asked the Commerce Department to punish the Canadian imports, but no other U.S. newsprint mills supported Norpac's claim, according to Chavern. The newsprint industry is shrinking because of the internet, not foreign competition. It also is regionally based. Publishers and other print-focused companies in the Midwest and Northeast rely on Canadian newsprint because there are no U.S. mills operating in these regions. Yet those newsprint customers now face skyrocketing prices because Canadian mills will pass on the cost of U.S. tariffs.

The process already has begun: Although industry groups still hope to block the tariffs, the U.S. government is collecting duties at the border and newsprint prices here are up 20 percent to 30 percent. Cost increases that steep are a direct threat to news gathering by newspapers nationwide: Not many readers will volunteer to, in effect, pay the Trump tariff.

To step back for a moment: Free trade in a globalized economy makes sense because it rewards efficiency and thus encourages specialization. For example, the U.S. has Silicon Valley, Canada has vast forests. Each country benefits from the other's products, as long as governments follow the rules of fair trade. Yet Trump is mistrustful, pulling out of a Pacific trade pact and seeking to renegotiate others, such as NAFTA, the U.S. agreement with Canada and Mexico.

Negotiations are fine, but slapping tariffs on imported goods to protect jobs at specific companies is unfair. In the case of newsprint tariffs, the Trump administration is causing significant harm to American newspaper readers and weakening American companies already are under stress from digital competition. Jobs are at stake.

It's not clear that the tariffs will stand. The International Trade Commission is set to conduct a final investigation, which will include a public comment period and hearings. This is an opportunity for members of Congress to call out the Trump administration's protectionism. We add our voice to those protesting this tariff, and defending free trade.

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