Newspapers struggling with a Trump tariff on newsprint

Jul 17, 2018
Originally published on July 17, 2018 5:14 pm

New tariffs are putting some Michigan newspapers and printers at risk of going out of business.

There’s more than a little irony in the fact that a state which built paper mills all over, no longer makes the kind of paper that newspapers use.

“The last Michigan producer was Manistique Paper and they closed in 2011. There’s actually only five American mills that are producing the type of paper that newspapers use,” said Julie Stafford with Stafford Printing and Publishing.

She and her brother Rob Stafford own the printing plant and publish the Daily News based in Greenville, Michigan.

U.S. consumption of newsprint has dropped 75 percent in the U.S. That’s why many of those American paper mills closed or switched to making other kinds of paper products such as corrugated boxboard to supply Amazon and other online retailers.

So, the Staffords now buy their newsprint from Canada. 

"There’s just not the capacity with the American mills to supply all of the printers in this country,” Julie Stafford said.

But, there is a new cost to buying imported paper. Recent tariffs have been placed on Canadian newsprint.

This all started when One Rock Capital, an investment/equity firm, bought a paper mill in the state of Washington. It complained to the U.S. Commerce Department that Canada was unfairly subsidizing newsprint. The Trump administration agreed and started out with a temporary six percent tariff in March. Then it increased dramatically.

“Our price, newsprint has gone up about 30 percent. So, it’s been a pretty big hit,” Rob Stafford said.

The total tariff is right at 32 percent now. This is not just on the paper Stafford Printing and Publishing buys; it’s on all Canadian newsprint which is about 60 percent of the newsprint used in the U.S.

It should be noted the other paper mills producing newsprint in the U.S. have not joined in the trade complaint against Canada. In fact, three of the other four are partially or wholly owned by Canadian companies.

Rob Stafford says they’ve had to pass along two price increases already.

“We just put another one in the mail last week for another increase in August. So, it’s been tough on us and our clients,” Stafford said.

Those clients include such publications as the Grand Haven Tribune, Lansing’s City Pulse, the Ann Arbor Observer, two Spanish language papers – one in Detroit, one in Grand Rapids – and an Amish newspaper, among several others.

“It’s about $2400 more a paper truck. And we get on average about ten truckloads of paper a month," Julie Stafford explained.  

That’s $288,000 a year for one printer in Greenville, Michigan.

Any printer or newspaper which gets is newsprint from Canada – again, because there’s not enough production in the U.S. – is being hit by the tariffs.

While some larger newspapers have gone mostly digital, for the papers serving rural areas, newsprint –paper – is still the best medium. Julie Stafford says broadband internet is not available in much of the rural area her paper serves.

“Paper is our business. You know, we made a decision about eight years ago that we can’t compete with the wire and all of the digital stuff that’s going on so we’re going to focus on local, local, local. I have seven to eight local stories in a newspaper in a day times six days a week. I think Washington should think about that kind of thing,” she said.

Her brother, Rob, says there are basically two necessary elements for putting out a newspaper: people and paper. Right now the newspapers are trying to cut paper.

"They’re really watching their page count. Some of our clients have been used to running two sections in their newspaper, but now they’re dialing back to only one section. Some have trimmed quantity. Other clients are looking at reducing the size of their products,” he said.

Rob and Julie Stafford say this could lead to more newspapers and printers going out of business across the nation.

“I hope it’s a very short term problem and I hope that Washington realizes the impact of these tariffs and what it’s doing to the publishing business and journalism as a whole,” he said.

Publishers are making their case to the International Trade Commission. There’s a hearing today. That commission can reject the tariffs, but it’s not clear that will happen given the current political atmosphere.

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