Shortly before Election Day 2016, a private equity firm in New York City announced it had acquired, for an undisclosed price, “a leading manufacturer of newsprint and various publication paper products,” based in Longview, Washington.
The purchase of North Pacific Paper Co. did not set off alarms. Hardly anyone noticed.
But the fallout from One Rock Capital Partners’ decision to buy the company — established as a joint venture between Weyerhaeuser Co. and Nippon Paper Industries — is now threatening the financial well-being of newspapers across the country.
Under pressure from the new owners of the Washington paper mill, who might have misjudged its strength in the marketplace, the U.S. Department of Commerce announced temporary tariffs of up to 32 percent on Canadian newsprint this year that quickly pushed its price to new heights.
The temporary tariffs are almost universally loathed in the publishing business and among competing paper companies. The government is reviewing whether to make the tariffs permanent or abolish them.
Members of Congress are pushing to roll back the tariffs through legislation, led by U.S. Sens. Susan Collins and Angus King of Maine. U.S. Rep. Bruce Poliquin, a 2nd District Republican from Maine, is among the co-sponsors of a companion bill introduced last week in the House.
Poliquin said Wednesday he is “pleased to support efforts to ensure Maine’s wood products industry and its workers, like those at the Rumford mill, are competing on a level playing field and that our trade policies are fair.”
“Maine workers can compete and win against anyone, but the rules have to be fair,” he said. “It’s important the newsprint they produce can be affordable and continued to be used by so many of our local papers throughout our state, so Mainers can get their local news.”
Michael Makin, president and chief executive officer of the Printing Industries of America, has hailed Collins and King “for standing up to say ‘time out’ on behalf of the printing and publishing industry.”
He said in a prepared statement his industry group has spent much of the year telling government officials about the trade realities involved in paper consumption, “and explaining the devastating impact” the tariffs are “having — now — on the print and publishing industries.”
Introducing the bill last month, Collins said the import taxes imposed by the administration “are being advanced under the principle of trade enforcement to protect the domestic paper industry. It is telling, however, that nearly all of the U.S. paper industry opposes these import taxes, including the large trade association representing the entire industry, the American Forest and Paper Association.”
“The paper industry opposes the import taxes because they threaten to decimate the paper industry’s customers and drive printers and publishers out of business forever,” Collins said.
The sponsor of the House bill, Rep. Kristik Noem, R-S.D., said she introduced the measure to help preserve her state’s newspapers.
David Bordewyk, executive director of the South Dakota Newspaper Association, told her he has “already heard from South Dakota newspaper publishers who fear that if these tariffs were to carry forward indefinitely, they will very well be forced to close their doors. That creates a ripple effect in the community for businesses that rely on the local newspaper to advertise and promote their goods and services.”
The bills by Noem and Maine’s senators would require the Commerce Department to probe the negative impact of the tariffs on publishers and newspapers, including the Sun Journal and other Maine publications.
The Scottsbluff Star-Herald in Nebraska said the tariffs have “driven up the cost of newsprint and hurt the bottom line of small and large dailies and weekly newspapers across America.”
In an editorial, it hailed “a group of wise congressmen and women who understand the importance newspapers play in the fabric of this great country” for pushing for relief from the extra cost the Trump administration has imposed.
The Boston Globe said the tariffs have already raised newsprint prices substantially.
“That affects newspapers across the country; after labor costs, newsprint is generally their second-highest expense,” the Globe wrote in an editorial.
The Richmond Times-Dispatch said the economic case for delaying the import tax “is a slam-dunk: The tariffs amount to a sales tax, and the people who suffer as a result are American workers in publishing and their customers.”
“Undermining the newspaper business — already struggling against digital disruptors and fake news headwinds — hurts democratic governance and civic accountability, especially at the local level,” the Virginia paper said in an editorial that called on its senators to support the proposal.
“Newspapers like this one are striving to meet the challenges of the digital age and adapt to changing economic circumstances,” the editorial read. “They shouldn’t have to do so with lead weights tied around their necks.”
Rolls of newsprint (U.S. EPA photo)