Maine’s two U.S. senators have introduced a bill to delay final implementation of an import tax on Canadian newsprint.
Federal agencies have begun imposing a tariff on imported newsprint of as much as 32 percent, and critics say it is already hurting U.S. newspapers and other print publications.
The tariff was implemented this year after a U.S. newsprint manufacturer in Washington state complained that Canada was unfairly subsidizing newsprint manufacturing, primarily through energy subsidies. That led the Department of Commerce and International Trade Commission to impose the import duty to level the playing field.
But that has led to a sharp increase in the price of newsprint for U.S. newspapers and other publishers. For most newspaper publishers, the cost of newsprint is the second-biggest expense behind labor costs.
The bill sponsored by Sens. Susan Collins and Angus King, called the PRINT Act, would require the Commerce Department to study the health of the domestic newsprint industry along with the newspaper industry, and issue a report to the president and Congress within 90 days. It would also put the import taxes on hold until the president certifies that he has received the report and has concluded that the import tax is in the nation’s economic interest.
The Commerce Department and ITC don’t typically study the impact of import taxes on secondary industries, only the industry that duties would help protect – in this case, newsprint makers.
Collins, a Republican, said she had fought in the past to help the state’s struggling papermaking industry, but said this particular import tax, instigated by one company with about 400 workers, doesn’t make sense because of the thousands of other workers it might harm.
“In this case, however, one domestic mill owned by a venture capital firm appears to be taking advantage of trade remedies to add to its own bottom line, putting thousands of American jobs at risk,” she said.
King, an independent, said the measure is important to protect the newspaper industry, and that small papers could be hit particularly hard.
The bill he and Collins are pushing “could help us better understand the damaging consequences of the DOC’s decision to impose duties and help ensure local newspapers don’t bear an undue burden from these misguided tariffs, so people in Maine and in rural towns across America can continue to receive their local news from hometown papers,” he said.
Lisa DeSisto, CEO of MaineToday Media, is thankful for the leadership that King and Collins have shown on an issue that is important to the future of the nation’s newspaper industry. She called the legislation “a good first step” toward a repeal of the import tariff.
MaineToday Media, which is owned by Reade Brower, publishes the Portland Press Herald/Maine Sunday Telegram, the Kennebec Journal in Augusta, the Morning Sentinel in Waterville and The Coastal Journal in Bath.
Brower also owns the Sun Media Group, which publishes the daily Sun Journal in Lewiston, The Forecaster newspapers in Greater Portland and Lakes Region Weekly newspapers. Brower also recently acquired the Journal Tribune of Biddeford and The Times Record of Brunswick.
The company buys its newsprint from Canadian mills, DeSisto said, noting that the tariff will cost MaineToday Media an additional $1 million in newsprint costs annually if it isn’t repealed.
“An unplanned increase of $1 million would be devastating,” DeSisto said, adding that the company is looking at options that could mitigate effects of the increase. DeSisto said MaineToday Media started paying the new tariff on March 1.
She is concerned that the tariff could harm smaller newspapers as they attempt to retain enough reporters to cover local news.
David Chavern, president and CEO of the News Media Alliance, a trade association representing about 2,000 newspapers in the United States and Canada, said the tariffs are hurting American newspapers.
“Publishers already face economic headwinds due to the migration of advertising from print to digital,” he said in a statement. “We simply cannot absorb extra costs from import taxes. Newspapers will close or be forced to raise prices for readers and advertisers. We are already seeing some papers cut back on news distribution and cut jobs. These tariffs are killing jobs and high-quality news in local communities.”
The bill sponsored by Collins and King was introduced Monday and has attracted bipartisan support, they said. It has been endorsed by printers and publishers representing more than 600,000 American jobs.