It’s not surprising that President Trump, after campaigning on the promise of a more aggressive trade policy, would take aim at China. It’s an economic competitor and geostrategic rival with whom the U.S. ran a $375 billion trade deficit in 2017.
But moves from Trump on trade against Canada, one of America’s economic partners and strongest allies, are confounding and counterproductive. A recent glaring example is the tariffs of up to 32 percent that the Commerce Department announced this month on imports of newsprint from Canada.
Only one U.S. company requested protection from imports of Canadian newsprint: North Pacific Paper Company, which is owned by a New York hedge fund and operates a single mill in Washington state. No other U.S. mills backed the request from NORPAC; nor did the trade association for the U.S. paper industry.
There’s a simple explanation: The industry understands that tariffs on imported Canadian newsprint will hit newspapers with higher costs they can’t absorb, and lead over time to lower demand for newsprint as newspapers are forced to cut back or even close.
Because of the tariffs, newspapers face price hikes of 20 percent to 30 percent for newsprint, their highest expense after payroll. To recoup these additional costs, they will need to look at some combination of raising prices for readers and advertisers, lowering their page counts, decreasing their distribution days, reducing their news coverage and cutting jobs. Some newspapers, already running lean operations, could be forced to close.
There is an obvious element of self interest in our industry’s opposition to tariffs on newsprint, but the resulting newspaper cutbacks and closures won’t just hurt those publications and their work forces. They’ll hurt their advertisers, readers and the communities that count on them for the in-depth news coverage that only newspapers provide.
The theory behind the duties is that Canadian mills have been taking advantage of government subsidies to export their newsprint at below market value and have damaged U.S. mills, which are selling less newsprint. In fact, there has been a 75 percent decline in demand for newsprint in North America since 2000, but it hasn’t been driven by foreign dumping. The recession and market forces have cut revenues from print advertising for newspapers by 50 percent. Printing fewer ads naturally means newspapers have been using less newsprint. Don’t blame Canada.
An independent federal regulatory agency, the International Trade Commission, has the power to suspend these tariffs. Members of Congress who are concerned about the negative impact of the tariffs in their communities need to appeal to the ITC to intervene. We would hope that group would include every member from Florida, where more than 150 daily or weekly newspapers serve scores of communities and support thousands of jobs. We urge readers to make sure their representatives in Washington, D.C., get the message.
The Sunshine State’s junior U.S. senator, Republican Marco Rubio, should be leading the charge as a longtime advocate of free trade. In a debate among GOP presidential candidates in 2016, Rubio pointed out that tariffs aren’t paid by the country on which they are imposed; they are paid by U.S. consumers. He argued instead for strengthening the economy through tax and regulatory reform so American firms can better compete with their international rivals. This is a prime opportunity for him to back up his economic wisdom with action.
Florida’s other top Republican, Gov. Rick Scott, also has a long record of promoting trade. As a strong supporter of the president, Scott has clout with the Trump administration. Now would be an excellent time for him to take advantage of it.