In a victory for the American newspaper industry, the U.S. International Trade Commission on Wednesday blocked tariffs imposed by the Trump administration on imported newsprint, finding that American producers weren't harmed by imports from Canadian paper mills.
The newspaper industry had complained that the rising cost of newsprint, typically their second-biggest expense, made it harder to operate.
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In July, lawmakers testified before the ITC that the tariffs were hurting the very paper industry they were supposed to protect. That's because publishers were responding to the additional costs by reducing the number of pages in their newspapers, thus dampening demand for newsprint, the paper used to make newspapers, books and advertising inserts. Others testified that the higher cost of newsprint had led newspapers to cut staffing and the number of local events that they cover.
"These tariffs were extremely harmful to our regional papers-the lifeblood of our local communities," Senate Minority Leader Chuck Schumer, D-N.Y., tweeted. "ITC made exactly the right decision to completely eliminate them. I will remain vigilant to make sure that they never return."
The Commerce Department had imposed the tariffs in response to a complaint from a hedge-fund-owned paper producer in Washington state that argued that its Canadian competitors took advantage of government subsidies to sell their product at unfairly low prices.
The department had revised the tariffs lower in a decision earlier this month, though newsprint buyers still would have been hit with an anti-dumping levy of up to 16.88 percent and anti-subsidy duties of up to 9.81 percent.
But under U.S. law, the two-part process for making the tariffs permanent also requires the ITC to find that the U.S. paper industry was harmed or threatened by the imports from Canada. The commission unanimously determined that no injury is occurring.
Members of a coalition of printers and publishers hailed the ruling, calling it "a great day for American journalism."
"The ITC's decision will help to preserve the vitality of local newspapers and prevent additional job losses in the printing and publishing sectors," said David Chavern, president and CEO of the News Media Alliance.
The North Pacific Paper Company had petitioned the federal government for tariffs to offset subsidies provided to Canadian paper mills. The company had told the ITC that prices had dropped so low for its paper that it could not justify keeping all three of its machines running. But since the imposition of the tariffs in January 2018, prices have recovered to the extent that it was able to hire back 60 employees and restore pay and benefit cuts made in 2017.
The company can appeal the commission's ruling.
"We are very disappointed in the USITC's negative determination, given that the record clearly shows that the domestic industry has been materially injured by dumped and subsidized imports from Canada," said company CEO Craig Anneberg. "We intend to review the USITC's written determination when it is issued in a few weeks, and we will assess our options at that time."
Canadian officials had criticized the Trump administration's decision to move forward with the tariffs earlier this month. The decision Wednesday comes as the Trump administration seeks to renegotiate a trade deal with its neighbors and with President Donald Trump threatening to slap taxes on Canadian auto imports.