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In show of force, 19 members of Congress testify against newsprint tariffs

WASHINGTON (From news reports) -- A bipartisan parade of lawmakers on Tuesday testified uniformly against preliminary tariffs on Canadian newsprint that are increasing costs for news organizations and causing some to cut staff.

Rep. Bill Flores, R-Bryan, told the International Trade Commission that the Freestone County Times, a community newspaper in his district, wrote in a survey that the tariffs are "kicking us very hard when we are already in a time of historic lows in revenues."

"If Freestone County were to lose its community newspapers, one cannot expect quality local coverage from a Dallas TV station, which is over 85 miles away," Flores testified.

Tuesday's public hearing came in the late stages of the ITC's process to determine whether to finalize tariffs on Canadian newsprint. Critics argue that the tariffs could be catastrophic, particularly for small newspapers in rural areas.

Both publishing and newsprint production industries have been hit hard by the advent of the internet, which led to a decline in consumer demand for print products and print advertising revenue.

The preliminary tariffs originated with petitions filed by the North Pacific Paper Company. They are distinct from the tariffs President Donald Trump has imposed on metals and washing machines imported from around the globe and a host of products imported from China.

The Washington state-based NORPAC is owned by the New York hedge fund One Rock Capital Partners. Of the five paper mills in the United States that produce newsprint, NORPAC is the only company claiming that Canadian companies' pricing is detrimental to its business.

NORPAC argues that alleged Canadian government subsidies have hurt the company's profitability. Company representatives testified that the preliminary tariffs have allowed them to re-hire 60 full-time and part-time employees.

"U.S. producers can be profitable if given a fair market to compete in," NORPAC CEO Craig Anneberg said. "However, if we are not able to level the playing field in the United States, the future of our mill is in jeopardy."

Current and former print mill workers from other companies also testified in support of the tariffs, though their employers either oppose the duties or have closed.

Members of Congress testified that affected commercial publishing, newspaper and printing industries employ around 600,000 people, while NORPAC employs around 385.

So far, the ITC and the Department of Commerce have ruled in NORPAC's favor. After finding that the Canadian government subsidizes newsprint costs, regulators imposed two sets of preliminary tariffs that increased the price of Canadian newsprint by around 30 percent.

"President Trump made it clear from the beginning that we will vigorously administer our trade laws to provide U.S. industry with relief from unfair trade practices," Secretary of Commerce Wilbur Ross said in a statement announcing the tariffs.

Newspapers across the country have announced cutbacks in response to the preliminary tariffs. For many newspaper publishers, newsprint is the second-highest cost behind personnel.

The Tampa Bay Times announced cutting its staff by around 50 people in April in response to the tariffs, and the Pittsburgh Post-Gazette reduced newspaper delivery to five days per week in June.

Grant Moise, The Dallas Morning News president and publisher and executive vice president of its parent company A.H. Belo, said in May that the paper was able to plan for some of the cost hikes from the tariffs, but was concerned about further increases.

"We planned for what we thought was going to occur, but obviously if that gets more aggressive in terms of the pricing ... we'll have to adjust," Moise said.

Nineteen members of Congress from 13 states testified Tuesday that tariffs on Canadian newsprint would have the opposite of the intended effect of protecting the domestic newsprint production industry. Sen. Susan Collins, R-Maine, said that the tariffs would cause newspapers to close in the long term and permanently decrease the market for newsprint in the United States.

Currently, Canadian paper mills provide 60 percent of the U.S. demand for newsprint, according to Randy Keck, the Texas ambassador to the National Newspaper Association.

Several Texas lawmakers have weighed in against the tariffs. Flores and Rep. Lamar Smith, R-San Antonio, said they sent letters to Ross opposing the duties.

Republican Sen. John Cornyn, Rep. Lloyd Doggett, D-Austin, and Rep. Beto O'Rourke, D-El Paso, have also previously voiced their opposition to the newsprint tariffs.

"Given the challenges to newspapers today, the fact that they are described by the president as the 'enemy of the people,' let's not do more to hurt them," O'Rourke said.

The ITC and Commerce Department both have to rule in favor of NORPAC for the tariffs to be permanently enacted. Final decisions are expected by the end of August.

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