Opinion: Unseen casualties of a trade war 


(courtesy photo)

By: 
RYAN PHILLIPS
SDN Editor

I hate the term “Fake News” as much as the next journalist. 

But some terrifyingly-real news as it relates to your community newspaper is originating from the very person who popularized and weaponized the term: President Donald Trump. 

In our current political climate, the back-and-forth between the White House and the national press is already paving the way for casualties that you likely won’t hear Anderson Cooper talk about on CNN in prime time, namely small community newspapers. 

With the ongoing power struggle between the United States and the rest of the world on the global economic stage, newsprint can easily take a back seat to sexier commodities like steel, aluminum and soybeans, all of which are vital to our economy not only in Mississippi, but the entire country. 

However, I ask that we put politics aside for a second and think critically about what these tariffs mean at the lowest level and why addressing the effects is important. 

First off, I don’t have to defend the importance of our newspapers in the communities we serve and I think our readers will agree. We are the only seven-day-a-week source where the citizens of Starkville, Mississippi, and West Point, Mississippi (five days a week), have access to a product that exclusively focuses on nothing but those communities. 

Very seldom will you see a national story in our papers unless the effects will be felt in our communities. 

And, what’s more, we are fortunate enough in both communities to have a dedicated readership that values the place their community newspaper holds in the fabric of their day-to-day lives. Our readers might not always agree with opinion pieces or the way something is covered, but not once since I got here have I heard someone say our product is not informative and valuable. 

Ask the readers who don’t get their paper by 6 a.m. and who call our office before the doors open. It’s certainly important to them. 

So, now that I’ve patted ourselves on the back, let’s talk about what these newsprint tariffs targeting Canadian paper mills means for us at our two Golden Triangle papers. 

I’m not an economist by any stretch, but it is easy enough for me to understand that tariffs, at least by the Trumpian definition, are aimed at keeping international manufacturers honest, like the Canadian paper mills where nearly every newspaper in America buys newsprint from. But the tariffs, in theory, are also supposed to provide an even playing field for American manufacturers. 

Washington state-based paper mill North Pacific Paper Company is one of the last bastions of American newsprint production and has been vocal about certain Canadian mills selling newsprint at “artificially low prices.”

The complaints come as only a handful of newspapers in America can still afford to buy newsprint in the states. 

According to a New York Times report, the U.S. Commerce Department heard the cries of this large American mill along with other newspaper publishers and opted to cap the anti-dumping tariffs placed on major Canadian mills at 16.88 percent, which, according to the report, is down from a much-higher 22 percent.  

The largest of the anti-dumping tariffs were then to be applied to a single manufacturer, Canada-based Catalyst Paper Company. However, the Commerce Department also said it would impose tariffs of up to 9.81 percent on several other Canadian paper companies to counteract government subsidies given to those manufacturers. 

The New York Times reports Catalyst has been exporting more than 425,000 metric tons of newsprint into the United States before the tariffs took hold, and will be slammed with total tariffs of more than 20 percent.

The cost of that additional 20 percent will ultimately be passed on to the consumer, the vast majority of which are too small to eat the price hike.  

I covered a similar dumping issue some years back when I was a business reporter in Birmingham. American steel producers, namely legacy companies like U.S. Steel, were stumbling over themselves as a glut of cheaply-produced steel was flooding the international market. 

The problem for many American mills, like American newspapers, came in the lack of a contingency plan. Companies operating electric arc furnaces like Nucor made money hand-over-fist because they saw the writing on the wall early and adjusted their technology to compete and produce steel at a comparably-low price to Chinese producers. 

But for companies operating archaic blast furnace technology across their company portfolio, like U.S. Steel, they had already come too far to turn around and adjust once it became apparent the market had permanently shifted. 

Whether it’s steel or paper, once a market is flooded with a cheap product for a long period of time, lower-level companies design their business model around the money being spent. When times were good and steel and newsprint were cheap, mom and pop operations could operate efficiently and big companies were living large. But when raw commodity prices suddenly inflate, small operations are often caught with their pants around their ankles, much like small town papers are now in the wake of newsprint tariffs. 

In essence, the rich get richer because large companies will be able to more easily absorb the cost, and then consume the market share left when smaller firms shutter their operations. 

While boosting American manufacturing is important, especially to the constituents of a pro-business president, what’s important to note is that, like with steel producers and customers, there doesn’t seem to be a contingency plan from either the government or the papers themselves when it comes to the cost of newsprint skyrocketing, as it currently is, and hitting the pocketbooks of community papers that are already struggling to drive subscriptions and monetize their digital presence. 

There are fewer American mills than ever, when they are needed most to provide competitively-priced newsprint for the little guys like us. 

While I’m not a fan of the tariffs, I also find it hard to believe that putting a pinch on the media through the cost of newsprint is not one of the motives behind this specific trade dispute. 

But it’s not the Starkville Daily News or the Daily Times Leader fighting an on-going political battle with the White House and the more the citizenry adopts the broad-brush view that all media is bad, then you can say goodbye to printed pictures of little Johnny missing a ball on a tee and honest coverage of the local policy issues that directly impact each person in our community.

I don’t think it is outside of the realm of possibility that, in putting the screws to Canadian newsprint manufacturers and forcing them to raise prices was, in essence, supposed to show the New York Times and the Washington Post who is boss. 

The problem is, big metro and national newspapers won’t suffer near as bad as the local papers who value every single subscription and who work tirelessly to cover their communities. We have no agenda at the community level and I regularly tell my reporters to never write about someone they aren’t prepared to talk to in the line at the grocery store. 

In 2018, the Washington Post, which is owned by billionaire Amazon founder Jeff Bezos, posted its second-straight year of profitability and likely won’t feel the crunch from rising newsprint costs, mainly because they have utilized Bezos’ tech savvy to capitalize on and grow their digital market share. 

You can do that when you have 800 editorial employees and cover events all over the world. But does that notion mean outlets like the Washington Post are any more valuable to the audience they serve than the Starkville Daily News or Daily Times Leader? 

I would take a whole bunch of convincing to think otherwise. 

I’ve worked in national news as both a statehouse reporter and desk jockey, and while the services many of these outlets provide are valuable, you as a journalist aren’t necessarily an engaged member of a community because of your station in that sector of the news media. 

It’s one of the concepts that led me to voluntarily leave Atlanta and come to Starkville, Mississippi - the prospect of being a true part of a community. 

And that’s the point I want to drive home. As communities, especially smaller ones, it is important that we are vocal when the effects of ill-informed trade disputes trickles down to the community level. 

I encourage you to write our folks on Capitol Hill and urge them to provide realistic solutions to the problems we are facing in regards to newsprint, because, as the Washington Post’s motto reads, “Democracy dies in darkness.”

Ryan Phillips is the executive editor of the Starkville Daily News and Daily Times Leader. The views expressed in this column are his and do not necessarily reflect the views and opinions of either newspaper or their staffs. 

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