Speed Reads

Trade Wars

U.S. trade panel strikes down Trump's Canadian newsprint tariffs, in win for newspapers, loss to private equity firm

On Wednesday, the five-member U.S. International Trade Commission unanimously overturned Trump administration tariffs on Canadian newsprint, handing a win to struggling small and midsize newspapers and a loss to the New York private equity firm One Rock Capital Partners. The Commerce Department had levied the tariffs starting in January at the request of One Rock, which purchased the Washington State paper mill North Pacific Paper Co. (Norpac) in 2016. One Rock executives met with Commerce Secretary Wilbur Ross personally to push for the tariffs, arguing that Canadian newsprint was unfairly subsidized.

The ITC, an independent government agency that adjudicates unfair trade practices, disagreed, saying its investigation "determined that a U.S. industry is not materially injured or threatened with material injury by reason of imports of uncoated groundwood paper from Canada." Its ruling means Canadian newsprint providers will no longer have to pay the 20 percent tariff. The levies had caused significant damage to newspapers, prompting layoffs, reduced page counts and publication days, and even closures. Newsprint is typically the No. 2 cost for newspapers, after employee salaries. Lawmakers from both parties and across the country had protested the tariffs.

When Norpac filed its complaint, no other paper manufacturer joined it. "The rest of the industry has blamed the declining print newspaper business, rather than Canada, for its struggles," The New York Times reports. One Rock, "according to people within the paper industry, most likely paid a premium for the business in hopes that it could make the case for tariffs and boost the business's revenue. Now it appears that bet has been lost." Some newspaper publishers said they're not sure the cuts will be fully reversed, given the daunting economics of running a newspaper in the digital age.