There has been a lot of talk about steel and aluminum tariffs levied by President Trump and retaliation by China. But tariffs that were enacted this winter already have far-reaching effects that have not gotten much press. That’s ironic, when you think about it, because the tariffs are on paper — the kind of paper The Bulletin and other newspapers are printed on.
Newsprint falls under a category of paper called uncoated groundwood paper, or UGW. Most American newspapers, from the very large to the very small, use this kind of newsprint, which is supplied by mills in Canada. It has been that way for a long time.
Last August, a New York-based hedge fund bought a small paper mill in Washington state. That hedge fund, One Rock Capital Partners, turned around and petitioned the Commerce Department to deploy federal trade and tariff laws to make newsprint as much as 32% more expensive per metric ton.
Canadian producers have already raised their prices to American newspapers. Even if we got no newsprint from Canada, American mills could not make up the shortfall because many have either closed or now produce paper other than newsprint.
Paper and ink are two of a newspaper’s biggest expenses after payroll, and these tariffs spell doom for many publishers who were already struggling.
At first glance, readers may not see this as a problem. “I’ll just read the news online,” they may think. What they don’t know is that despite all the dire predictions for the newspaper industry, printed papers support their digital versions. If printed papers disappear … the online versions will quickly follow unless a viable digital subscription model is in place.
If higher tariffs remain, it will be a Pyrrhic victory for One Rock Capital and the U.S. Commerce Department. The wreckage will be tens of thousands of media jobs lost to the wind while communities lose their local newspapers and websites.