A federal agency handed the financially beleaguered newspaper industry a victory Wednesday, Aug. 29, with a unanimous ruling that effectively ends a series of tariffs that drove up the cost of one of the industry's most important commodities: newsprint.
By a 5-0 vote, the U.S. International Trade Commission found that American newsprint producers haven't been injured by Canadian imports, thus nullifying a series of tariffs imposed earlier this year by the Commerce Department on imported products.
The tariffs contributed to spot shortages of paper and a sharp spike in the cost of newsprint, bedeviling publishers who rely on printed newspapers for much of their revenue. The price hikes were another blow to an industry that has seen a long decline in ad revenue and circulation.
Faced with newsprint costs that rose as much as 30 percent, newspapers cut staff, consolidated news sections and generally trimmed their use of paper.
Although the news industry applauded the ITC's ruling, it's not clear how it will affect paper prices. Removal of the tariffs will probably take some pricing pressure off Canadian suppliers - the newspaper industry's dominant supplier - but rising demand and limited production capacity could act to keep prices from falling precipitously.
"Newspaper publishing is still a tough business, but this is a good day, not just for newspapers but for the communities that depend on us as a civic asset," said Paul C. Tash, chief executive of the Tampa Bay Times, which eliminated 50 jobs earlier this year to offset higher newsprint costs. "This doesn't make all the challenges go away, but at least this challenge has been dispensed."
Tash was reluctant to predict what will happen to newsprint prices with the tariffs' removal and whether any relief will enable publishers to restore jobs and reverse other cutbacks. "It's a lot like gas prices," he said. "Prices spike more quickly than they come down." He said, however, that the tariffs were "inflationary kerosene" on an already tight market.
The tariffs were imposed by the Commerce Department earlier this year following a petition by the North Pacific Paper (NorPac), a mill operator based in Longview, Wash. NorPac argued that Canadian competitors were hurting American manufacturers by dumping their products below costs on the U.S. market, an unfair trading practice.
A Commerce investigation found in NorPac's favor, and the department began imposing higher duties on Canadian products in January, setting off a price spike.
The ITC, an independent federal agency, was charged with determining whether NorPac had been harmed by the trading practices found by the Commerce Department. The agency's five commissioners voted "negative" in rapid succession on Wednesday, thereby vacating the tariffs.
The agency gave no official reasoning for its determination. It will issue an official report about its ruling next month.
In a statement, NorPac's chief executive, Craig Anneberg, said, "We are very disappointed in the USITC's negative determination, given that the record clearly shows that the domestic industry has been materially injured by dumped and subsidized imports from Canada. We intend to review the USITC's written determination when it is issued in a few weeks, and we will assess our options at that time."
This article was written by Paul Farhi, a reporter for The Washington Post.