Congressman David B. McKinley, P.E., (WV-1) testified before the United States International Trade Commission this morning on the unintended consequences of the new tariffs on newsprint imported from Canada. Earlier this year, the Department of Commerce -- responding to a petition filed by North Pacific Paper Company (NORPAC), a Wall Street-owned paper mill based in Washington State, assessed preliminary tariffs on the newsprint industry.
"There has been a 70% decline in demand for newsprint paper since 2000, leading to large-scale closures of newsprint mills in both America and Canada. In fact, there are only five paper mills still operating in the United States who combined can only fulfill 34% of the nation's newsprint demands," said McKinley.
"Papers across the United States are now facing significant cost increases from these tariffs. The impact varies by paper, but as a whole this amounts to an estimated $421 million annual loss to the industry every year the tariffs remain in place. This is having a particularly negative impact on rural America, which depends on their paper for local news," McKinley said.
"Look, the closure of newsprint plants on both sides of the border boils down to a declining market, not unfair trade. If the Commission feels compelled to help NORPAC, they should find a regional solution for the Northwest, and exempt the rest of the nation's papers from the tariffs," McKinley added.
Click here to read an op-ed McKinley recently wrote on the issue.
Following U.S. trade laws, the Commerce Department acted on NORPAC's petition earlier this year to impose preliminary tariffs on newsprint imported from Canada. These tariffs total approximately 30%. NORPAC's petition centered on their complaint that subsidized Canadian newsprint is being dumped into America at low prices.
NORPAC is one of five paper mills still operating in the United States.
* These mills combined can only fulfill 34% of the nation's newsprint demands.
* Three of those five mills are in Washington State.
* It's economically inefficient to ship newsprint across the country.
* The rest of America's newspapers rely on the two mills in the Southeast or Canada to fulfill their needs.
The impact on operational costs varies by newspaper:
* Ranges from 2 cents to 10 cents in increased paper costs per newspaper.
* According to the Pew Research Center, there are 33 million papers printed daily.
* Using a cost increase from the middle of the range at 3.5 cents, this amounts to a $421 million annual loss of revenue to the industry.
According to a recent survey of newspapers by the News Media Alliance:
* 46% said they likely will be reducing staff as their solution by an average of two and a half positions.
* Newspapers had already been losing nearly 2,000 jobs per year.
The tariffs are having a detrimental impact on West Virginia's 19 daily and 54 weekly newspapers. For example:
* West Central Publishing in St. Marys, West Virginia is seeing their operating costs go up $18,600 annually.
* The Exponent Telegram in Clarksburg, West Virginia is seeing an increase of over $180,000. That's the equivalent of four full-time position.