International Trade Commission Scraps Canadian Newsprint Tariffs

Aug 30, 2018

Proposed tariffs on Canadian paper products by the Trump administration have been struck down. That’s good news for the newspaper industry and others that rely on cheap paper.

The Trump administration announced in January that it would investigate unfair trading practices with Canada. After an appeal from the North Pacific Paper Company, a mill located in Washington state, the Commerce Department announced a proposed tax on Canadian paper upwards of 20 percent. The move brought strong reaction from companies that depend on newsprint, like Quad Graphics in Saratoga Springs.

In July, Quad Graphics CEO Joel Quadracci said the tariffs were already sending prices sky high.

“The prices are already gone way through the roof. And we’re seeing double-digit decline in the product that uses newsprint already. And that’s a big deal,” Quadracci told WAMC.

The company started losing customers, too. If permanent, the tariffs could have cost Quad Graphics and its customers $90 million a year.

U.S. Senate Minority Leader Charles Schumer came to the plant, telling workers he’d lobby the White House to reverse course on the tariffs.

“Tariffs are supposed to help jobs in America. This tariff hurts jobs in America. Plain and simple,” said Schumer.

Quad Graphics employs more than 800 workers in New York.

Lobbying by Senator Schumer and other leaders in Washington including House Speaker Paul Ryan, who hails from Wisconsin, where the company is headquartered, led the Commerce Department to reduce the tariffs from around 20 to 10 percent.

On Wednesday, the tariffs on Canadian groundwood paper imports were struck down by the International Trade Commission.

Senator Schumer called the ITC’s action the right decision.

Patrick Henderson, Director of Government Affairs with Quad Graphics, says the company was “very pleased” that the tariffs have been eliminated. But, he says, some damage has already been done and it’s now up to the company to convince customers to come back. 

“There’s a lot of barriers for going back into print. So we’ll work hard to get them back. But no doubt there will be customers that we will have lost permanently,” said Henderson.

Henderson said suppliers in the U.S. produce a million tons of the newsprint Quad depends on, but there is three million tons of demand.

“The U.S. producers simply cannot meet that demand. And the barrier for entry for a new paper machine can be upwards of a half a billion dollars. And so that is a difficult ask of a paper company to put in that kind of investment,” said Henderson.

The tariffs would not only affect printers, but also newspapers.

An industry group called Stop Tariffs on Printers & Publishers, or STOPP, of which Quad is a member, applauded the ITC’s move. 

David Chavern, CEO of the News Media Alliance, a newspaper industry lobbying group, called Wednesday’s decision a “great day for American Journalism.”

In a statement, Chavern said the “end of these unwarranted tariffs means local newspapers can focus once again on playing a vital role in our democracy by keeping citizens informed and connected to the daily life of their communities.”