WASHINGTON, D.C. — The International Trade Commission on Wednesday voted nanimously voted to reverse the newsprint tariffs.
NORPAC, a Washington State mill purchased by One Rock Capital Partners in 2016, asked the Commerce Department and International Trade Commission to impose newsprint tariffs on Canadian newsprint suppliers.
NORPAC said the Canadian companies were being unfairly subsidized by their government and were dumping paper into the U.S. below fair value. Commerce did that on a preliminary basis in January and March, 2018. Canadian paper companies have been paying at the border since then. Deposits have been held by the U.S. government awaiting final determination.
Wednesday, the ITC removed the newsprint tariffs. The commission’s reasoning will be made available when it issues a final report on Sept. 17. The cash deposits made by Canadian firms will be refunded to newsprint manufacturers.
Paul Boyle, News Media Alliance’s senior vice president for Public Policy, thanks the elected officials, press associations and newspaper companies for their efforts. “Thanks for everyone’s help in this fight. It was a total team effort.” Boyle said.
U.S. Senators Shelley Moore Capito, R-WV, and Joe Manchin, D-WV, and U.S. Representatives David McKinley, R-W.Va., and Alex Mooney, R-WV; spoke out about the negative impact the tariffs would have on West Virginia newspapers and supported legislation to stop the tariffs. Along with the West Virginia Press Association, newspaper companies including Odgen Newspapers, NCWV Media, AIM Media and Raycom Media are among the West Virginia newspaper groups that spoke out against the tariffs.
Statement from David Chavern, president & CEO, News Media Alliance:
The ITC made the right call in reversing newsprint tariffs
We applaud the International Trade Commission (ITC) for today reaching a final, unanimous negative determination that Canadian imports of uncoated groundwood paper, which includes newsprint used by newspapers, do not cause material harm to the U.S. paper industry.
The Department of Commerce recently upheld the tariffs and, though they revised them to slightly lower levels (but still as high as 20 percent), the tariffs would have been unsustainable for newspapers, other printers and publishers and printers.
Fortunately, our voice was heard at the ITC hearing last month, and they made the right call today in reversing these harmful tariffs.
Over the last several months, while the Department of Commerce and the ITC conducted their investigations into the trade case (brought by one paper mill, NORPAC), we have emphasized that the decades-long shift of news and information from print to digital platforms – not imports from Canada – is the cause of the decline in demand for newsprint.
Local papers provide essential coverage of local governments and community news and events. In many communities, the local paper is the only source of community news. Unfortunately, the damage to newspapers from preliminary tariffs imposed by the Department of Commerce since January has already been done. The tariffs have disrupted the newsprint market, increasing newsprint costs by nearly 30 percent and forcing many newspapers to reduce their print distribution and cut staff.
We hope today’s reversal of these newsprint tariffs will restore stability to the market and that publishers will see a full and quick recovery. Our democracy depends on it.
Statement from Susan Rowell, president of the National Newspaper Association:
“We are immensely gratified today by the International Trade Commission’s vote not to impose permanent tariffs upon the North American newsprint supply. The paper markets serving community newspapers can soon begin to move back to market pricing without the heavy hand of government imposing taxes upon the primary suppliers of newsprint,” said National Newspaper Association President Susan Rowell, publisher of the Lancaster (SC) News.
“We will not know until mid-September the commission’s rationale for its vote of 5-0 against continuing newsprint tariffs. We understand it will take a couple of months for the preliminary tariffs to be unwound and credits to be issued back to those companies who had paid duties at the border since last January. But it is an enormous relief to know that the ITC does not find a basis for continuing sanctions.
“Our efforts to educate the commission about the realities of today’s printing and publishing world were part of a large coalition of industries, led by the News Media Alliance and Resolute Inc., which supplies much of the U.S.-produced newsprint. The leadership of the law firm Covington and Burling and contributions of time and talent by so many publishers, editors, communicators of all sorts, and members of the public who joined a petition against the tariffs were all contributors to today’s result. We are particularly grateful to Sens. Susan Collins and Angus King of Maine, and Rep. Kristi Noem of South Dakota, and all of their co-sponsors for introducing the PRINT Act of 2018 in support of our views.”
The NNA’s Case of the Newsprint Tariff: What just happened?
Escalating printing costs driven by tariffs on Canadian newsprint caught many newspapers by surprise this year. Comments about a system where one company could deliver such a blow to an entire industry ranged from wry to outraged. Now the International Trade Commission has said the tariffs will stop. Here is a quick explanation.
Q. Where did the tariffs come from?
A. NORPAC, a Washington State mill purchased by One Rock Capital Partners in 2016, asked the Commerce Department and International Trade Commission to impose them. NORPAC said Canadian suppliers were being unfairly subsidized by their governments and were dumping paper into the U.S. below fair value. Commerce did that on a preliminary basis in January and March, 2018. Canadian paper companies have been paying at the border since then. Deposits have been held by the U.S. government awaiting final determination.
Q. How were they stopped—or were they?
A. Not yet. But soon. The ITC on Aug. 29 voted 5-0 against imposing permanent tariffs. We will know the reasons by mid-September. Then, the Commerce Department instructs the Customs and Border Patrol to stop collecting the tariffs. Money paid in by the producers thus far will be sorted out and returned. The whole process takes a couple of months.
Q. Is this the end of it?
A. NORPAC has the right to appeal the decision. Because the case is not final until Sept. 17, its decision may not be known until then. But tariffs would not be re-imposed during an appeal, barring some unusual action.
Q. Could the White House reverse this decision?
A. The tariff petition did not come from the White House. It came from a single company using existing trade laws. The ITC is an independent commission, with five members appointed by the previous two presidents. President Trump has the right to appoint a sixth commissioner but his nominees have not yet been seated. The president does have some power to impose tariffs under his national security authority, as he did in the steel/aluminum cases, but there has been no indication that such an action is considered in the newsprint cases.
Q. What will happen to paper prices?
A. The market will determine that. Once the tariffs are gone, the heavy weight of these sanctions will no longer be on the producers. But decisions by some producers to get out of the market because of the tariffs could still affect the supply/demand balance.
Q. So some damage is already done?
A. Yes. Many decisions made across the paper-reliant industries have occurred over the past seven months that may be permanent. Some newspapers have folded. Many have trimmed pages or paper sizes. Lots of jobs went unfilled. Whether removing the tariffs will enable any of these decisions to be modified is unknown.
Q. Why did the ITC lift the sanctions?
A. We will know in mid-September when its final determination report comes out. ITC had two jobs to perform: 1) to decide whether the domestic paper producers had been injured by the alleged uncompetitive practices of Canadian producers; and 2) whether sanctions would cure the injuries. Its decision could have been based upon analysis of either of these questions. National Newspaper Association and others in the STOPP (Stop the Tariffs on Printers and Publishers) Coalition, had argued that any injury to domestic paper companies had come from falling demand for paper. NNA’s incoming president Andrew Johnson, publisher of the Dodge County (WI) Pionier, was one of two publishers to testify to ITC in July 2018. The other was Paul Tash, publisher of the Tampa Bay Times. Many, including the News Media Alliance’s consultant Charles River Associates, provided economic analysis of the allegations.