If you think President Trump has an antagonistic relationship with the press now, just wait until his administration slaps a new 30% tax on newsprint.
Seriously. That’s the threat America’s newspaper publishers are warning about, with the Commerce Department’s International Trade Administration set to issue a preliminary determination by March 7, 2018, on whether Canada’s export into the United States of “certain uncoated groundwood paper” meets the legal tests to qualify for countervailing duties under the Tariff Act of 1930.
The publisher of Maine’s largest newspaper, the Portland Press Herald, raised an alarm about the issue in her year-end letter to readers. “We are facing a new challenge that threatens our newspapers,” the publisher, Lisa DeSisto, wrote. “The Trump administration is looking to impose a tariff on newsprint from Canada, which would have a disastrous effect on the entire newspaper industry. We purchase all our newsprint from Canada, as Maine mills no longer produce it. It would be near impossible for us to absorb a 30 percent increase in newsprint costs.”
Ms. DeSisto wrote, “We hope the president backs away from that idea because it could hamper our ability to bring you the journalism you have come to expect from us.”
Nor is Ms. DeSisto alone. The News Media Alliance, the newspaper trade association last seen pleading with Congress for a special antitrust exemption to allow Washington Post owner Jeff Bezos and Buffalo News owner Warren Buffett stronger negotiation positions against Google and Facebook, is now mobilizing against the newsprint tariff.
“These duties, if implemented, have the potential to run many small-town newspapers out of existence,” the chief executive of the News Media Alliance, David Chavern, warned on December 19.
Mr. Chavern claims the American-based paper company pushing the tariff case, North Pacific Paper Company of Longview, Washington, is owned by “a New York-based hedge fund.” Actually, it’s a private equity firm. There’s plenty of institutional and hedge fund money backing Mr. Chavern’s newspaper chain owner-members, too.
In general, I’m for cutting taxes, not raising them. I also wrote a biography of Samuel Adams, who started what became the American Revolution in part as a protest against the Stamp Act, a British tax on paper, including newsprint, in what were then the American colonies. So I can understand the concern of the newspaper proprietors.
Even so, though, it’s hard to escape a certain amount of humor in the whole situation. A lot of the newspaper owners who are now complaining that Mr. Trump’s newsprint tax could put them out of business or raise prices for their customers are the same ones who spent the past few months issuing editorials ridiculing efforts by President Trump and Congressional Republicans to cut taxes on businesses.
Take the Portland Press Herald, which does some excellent journalism, as an example. Just a week before its publisher warned about the potentially “disastrous” effect of a tariff on her industry, Press Herald issued an editorial excoriating Senator Collins for voting in favor of the Trump tax cut bill. The editorial condemned the legislation as “a rehash of trickle-down economic theories that have proven not to work.”
“It will benefit the already-wealthy most,” the editorial fulminated. “In the long term, it drops a time bomb in the federal budget that will put pressure on Social Security, Medicare, and Medicaid, negatively affecting people who are already struggling… a 40 percent tax rate cut for corporations that are enjoying near-record profits.”
Well, if the Portland Press Herald is so concerned about the federal budget deficit, you’d think it would be glad to help to do its part to close it by means of a newly increased tax on newsprint. If the Press Herald thinks “the already-wealthy” and profitable corporations have plenty of money, what better way to equalize things than with a newsprint tax that would mainly hurt newspaper owners such as Bezos, Buffett, or Carlos Slim, the Mexican billionaire who is the largest economic owner of the New York Times?
The other amusing aspect of the situation is that just a few years ago, the New York Times Company was begging the Obama administration to impose precisely the tariff that the newspaper industry now is complaining about. Back then, the Times Co. was more vertically integrated — it owned part of a Maine paper plant that has since closed. That plant made coated paper used for Sunday newspaper magazines rather than the uncoated paper at issue in the present case, but many of the issues are the same.
It’s almost enough to make one think that newspaper’s positions on the trade, dumping, and tariff issues involved depend less on the facts and law involved, and more on whether they happen to own the American paper plants themselves or whether they import paper from foreign vendors. Maybe it depends on who is president at the time of the tariff.
Tempting as it might be for Mr. Trump to slap the tariff only on the newspapers that opposed his tax cut, it’d be a violation of the First Amendment and a mistake worthy of George III. The Commerce Department’s challenge will be to applying the law impartially to the facts of the case. Newspaper readers and owners will be watching, as will be the owners of the American paper mill and its employees.