Cooper Applauds End to Trump Newspaper Tariff

Aug 31, 2018
Press Release

WASHINGTON – Weeks after fighting for such an outcome, U.S. Rep. Jim Cooper (TN-05) celebrated the end of President Trump’s Commerce Department tariff on a chief component of newsprint, heralding a big win for local and national media organizations that rely on the printed page.

"This is an awesome week for American journalism,” Rep. Cooper said. “Newspapers are important defenders of democracy. Thank goodness the threat of newspaper tariffs is over.”

Rep. Cooper joined several members of the House and Senate in publicly opposing the tariffs earlier this summer at a July 17 hearing of the U.S. International Trade Commission. Rep. Cooper’s full testimony to the commission is below.

First announced in January, increased in March and overturned this week after a unanimous vote by the commission, the tariff – some as high as 20% – affected newspapers large and small. This week’s vote means the tariff will be stopped.

Newsprint is the paper on which newspapers and retail inserts are printed, and uncoated groundwood paper is a key component of the final product.

Just five U.S. paper mills produce such paper. Meanwhile, Canada produces about 60 percent of all newsprint paper in the world. The U.S. imported more than $1 billion of uncoated groundwood paper in 2016.

Tennessee newspapers are delivered to more than 1 million households each week.

Supplementing Rep. Cooper’s testimony, three Tennessee newspapers – The Manchester Times, The Tullahoma News and Morristown’s Citizen Tribune – submitted letters for the record, stating the negative effects of the tariff. The Tennessean also editorialized on the tariff, imploring the Commerce Department to stop the “job-killing tax on newspapers.”

U.S. International Trade Commission
Testimony of Rep. Jim Cooper (TN-05)
Hearing:  Uncoated Groundwood Paper (INV701-TA-584 & 731-TA-1382)
July 17, 2018

Thank you, Chairman Johanson and Commissioners, for convening this important hearing to address the adverse effects of the duty on uncoated groundwood paper from Canada.

As you well know, uncoated groundwood paper is primarily used to make newsprint, the paper on which newspapers and retail inserts are printed. According to the Department of Commerce, the United States imported over $1 billion of uncoated groundwood paper from Canada in 2016. We have to import; we have no choice. Canada produces about 60% of all newsprint paper in the world and few U.S. paper mills actually produce this kind of paper. Five, to be exact. On their best day, those five mills are not going to produce enough newsprint at a low enough cost to cover the circulation of America’s biggest newspapers. It’s no surprise that American newspapers and printing companies import most newsprint paper from Canada.

This investigation started with one company, but the practical effects of this shortsighted tariff are already dramatic. Paper is already the second-largest expense for any newspaper, behind labor. To make up for the increased cost of importing paper, newspapers across the country are cutting pages, decreasing circulation and eliminating jobs. Newspapers and printing companies are not suddenly going to start buying newsprint from American producers. They aren’t buying from them now for several reasons: there are too few, it is too expensive, and there just simply isn’t enough supply to keep up with demand.

This tariff on newsprint and the ultimate decision on uncoated groundwood paper will hurt rural and local papers the most. Big papers like The Wall Street Journal will initially cut pages, but local papers like The Dickson Herald could cut jobs and even close their doors. A small increase of 2 cents more per paper per day may not sound like much, but it has a big effect. It will add over $8 million in annual expenses for The Wall Street Journal. Newspapers provide the best source of news information around. Tennessee newspapers are delivered to over 1 million households each week. Less news will lead to an increasingly distant and ill-informed American citizen; it will make them more likely to make an ill-informed choice at the ballot box, or perhaps not even vote at all. In times like these, that is something this country cannot afford.

Even before this uncoated groundwood paper investigation was initiated, the paper and newspaper industries were already declining. While many of us would like to believe that most Americans read the news each day, it is simply not the case. Subscriptions and circulations are down and continue to drop. While The New York Times can reach many of its readers through online content, rural Tennesseans rely on their printed local papers for the news that directly affects them. The decline in demand for newsprint and other paper is due to the decline of readership of newspapers, not imports from Canada.

Even with this decline in readership, the American printing and newspaper industries employ over 600,000 people. One company filed a complaint to initiate this investigation and now we are headed down a rabbit hole. Newsprint prices have already increased by about 30% since the start of the year. We have around 150 newspapers in circulation in Tennessee, 20% of which are printed daily. What does that mean for those papers? Right now, it means a hiring freeze and fewer pages dedicated to the actual news until the tariff is either eliminated or becomes final. I am proud that the main newspaper for the state, The Tennessean, is produced in my district. But The Tennessean and local papers alike cannot afford this unforeseen and unnecessary financial burden. The Manchester Times in Manchester, Tenn., will pay an additional $40,000 over the next year because of the increased price of newsprint. The Tullahoma News will pay $50,000. That is not sustainable. I would like to submit three letters for the record from local papers in Tennessee stating the effects of this tariff and describing their grim futures.

Newspapers make their profit in print because of retail inserts. There is very little profit to be made when readers are all online. Quad Graphics produces retail inserts for magazines and newspapers and has a plant in Nashville that employs about 200 people. That plant consumes over 52,000 tons of newsprint each year. With the tariff, the Nashville plant alone will see its paper expenses increase by almost $8 million per year. There is no chance of this company being able to keep up its same production levels with the same employee base. It’s impossible. Those additional expenses will be passed along to customers.

I appreciate the USITC’s investigation into the dumping of uncoated groundwood paper into the American market. But only one of the five newsprint-producing paper mills in the United States filed this complaint. That is telling. The damage this tariff will do to the newspaper and printing industries will be catastrophic. This knowledge should far outweigh one stakeholder’s concern of subsidized paper imports from Canada. America’s trade laws should protect the whole, not endanger the few. This administration’s approach to trade is cavalier and ill-informed. I cannot sit by and watch this country’s news industry be destroyed by federal overreach. I hope the USITC will stand with me in protecting American jobs and its news.

Thank you.