Trump Administration Tariffs Hurting Saratoga Springs Company

Jul 5, 2018

A move by the Trump administration to place tariffs on Canadian paper products is threatening businesses in the United States. Democratic Senate Minority Leader Chuck Schumer visited a plant in upstate New York today to urge the U.S. Department of Commerce to rethink the proposal in an emerging trade war.

In January 2018, the Commerce Department announced a plan to tax Canadian paper. In August, those duties could become permanent.

The Trump administration is investigating potential unfair trade practices and argues that Canadian paper subsidies are hurting U.S. companies.

But American jobs that rely on cheap Canadian paper are being threatened, says Senate Minority Leader Charles Schumer.

Thursday, the New York Democrat spoke from the factory floor at Quad Graphics in Saratoga Springs, which uses what’s known as uncoated groundwood paper purchased from Canada. The company uses the paper to print newspaper inserts, catalogs, circulars, and other materials that might show up on your doorstep. 

Schumer says while the company could purchase the paper it needs in the U.S., it would cost more to ship the heavy paper to its facilities in New York and Wisconsin.

“There are some plants in the U.S. but they’re so far away, this is heavy paper, the cost of shipping them up here to Quad would make them uncompetitive,” said Schumer.

Quad Graphics has more than 800 employees in New York. It estimates the Trump administration’s tariffs on Canadian paper could cost the company and its customers $90 million a year.

It almost goes without saying, that an increase in newsprint prices could harm newspapers  across the country. Already, Schumer says newsprint prices have risen by more than 20 percent over last year.

Quad Graphics CEO Joel Quadracci flew from Wisconsin to Saratoga Springs to discuss the issue with Senator Schumer. Quadracci says the tariffs are already hiking prices.

“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,” said Quadracci.

Quadracci says Quad Graphics has already started losing customers. And for a struggling industry like newspapers, once you lose a customer it can be hard to get them back.

“A lot of times you don’t get them back because they’ve moved elsewhere. And the problem with newspapers is, if circulation declines, which has its own problems – it’s still a very efficient product out there for getting the news – but ultimately, these small newspapers, too, are going to go out of business,” said Quadracci.

Another uncertainty from the Trump administration harming the company, says Quadracci, is cutbacks at the U.S. Postal Service. Quadracci says 15 percent of the Post Office’s volume comes out of Quad Graphics plants.

The American Forestry Paper Association, which represents 80 percent of the country’s paper manufacturers, is also opposing the tariffs.

Schumer is envisioning a bipartisan push to end the tariffs, as Wisconsin, which is also potentially harmed, is the home of Republican House Speaker Paul Ryan.

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

As the Commerce Department finalizes its assessment of the preliminary antidumping and countervailing duties on Canadian paper, The United States International Trade Commission will decide whether the taxes will harm the American paper industry.