The U.S. Commerce Department came to the rescue earlier this year of a company based in the state of Washington — the North Pacific Paper Co. — that complained its competitors in Canada unfairly benefited from subsidies provided by the Canadian government.
All told, the Commerce Department imposed tariffs of 30 percent on imported newsprint.
But in helping one company, the federal government is pushing dozens, perhaps hundreds of other companies to the financial brink — forcing layoffs, diluting or wiping out already thin profit margins and putting some out of business.
The Commerce Department is reviewing its decision. When it’s finished, perhaps sometime in August or shortly thereafter, it must repeal the tariffs that are devastating newspapers all over the country.
There is no reasonable justification for the damage that has been caused and will continue if the tariffs are not abandoned.
Here’s the dilemma, to help one company and its employees in one state, the federal government is devastating many companies with many employees in many states.
Further illustrating the problem of alleged unfair Canadian trade practices in the paper industry is there are not enough domestic newsprint producers to meet demand. Because of declining demand in newsprint, most domestic newsprint producers have gone out of business.
Canadian newsprint is a market necessity to make sure certain newspapers can be printed and delivered to their subscribers.
Discussion of tariffs and unfair trade practices have been much in the news following President Donald Trump’s complaints about foreign countries’ trade practices, especially China.
But this dispute was boiling long before that.
As a general rule, behind employees, newsprint is the second-biggest cost newspapers have. Consequently, the 30 percent increase in newsprint represents far more than just the financial pressure being imposed on the newspaper industry and its employees.
As Forbes magazine editor-in-chief Steve Forbes recently wrote, “the killing of local newspapers by the imposition of tariffs would gut the nation’s free press.”
“It is local newspapers, not cable news networks, that scrutinize the goings-on at town halls, and how tax dollars are spent on schools and public works,” he wrote.
His point is that for our democracy to thrive, there must be an informed public served by healthy news outlets, particularly newspapers.
It’s widely recognized that the newspaper industry is not nearly as strong and profitable as it once was. That’s largely due to competition from the internet.
In a free market, that’s the way things sometimes go. Newspapers are struggling to deal with that competition in a way that re-energizes their business. But, alas, they have yet to discover the key to success.
But it’s one thing to deal with the forces of a free and open market and quite another to try to overcome a government-created problem — the 30 percent newsprint price hike imposed by the federal government.
Some have suggested that the tariffs will spur the rebirth of domestic newsprint production. But such a move would require the investment of hundreds of millions of dollars with the expectation — a long shot, at best — that the domestic newspaper industry that once was will be again. It’s not going to happen.
But the government can at least take its foot off the throat of the newspaper industry.
The current temporary tariff policy must be repealed. It’s already damaged businesses across the country while creating a threat to our democratic way of life. Making it permanent would be the height of self-destructive folly.