ITC Testimony Regarding Newsprint Tariffs Roger F. Wicker, United States Senator, Mississippi Thank You. Mr. Chairman and Commis
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ITC Testimony Regarding Newsprint Tariffs Roger F. Wicker, United States Senator, Mississippi Thank you. Mr. Chairman and Commissioners, for this opportunity to testify today. I want to express my opposition to imposing permanent new anti-dumping and countervailing duties on Canadian imports of uncoated groundwood paper. I hope the ITC will vote to reject such new tariffs. The Petitioner, NORPAC, is the only domestic producer who claims these sanctions will protect domestic production of newsprint from Canada. An overwhelming majority of producers, including Resolute Forest Products, with newsprint operations in Mississippi, argues these sanctions are likely to harm domestic newsprint producers and their key customers. Let me reiterate: NORPAC is the only domestic producer that is arguing for sanctions. The imposition of costly tariffs, now close to 35 percent in some cases, is creating price volatility and supply challenges. Newspapers and printers, already navigating industry changes, will be put out of business. As I mentioned, Mississippi is home to one of the five mills in the United States that produces uncoated groundwood paper, also known as newsprint. This particular mill, in Grenada, Mississippi, employs over 160 workers with good-paying jobs and represents an annual economic impact of approximately $100 million. On top of the direct employment, it is estimated that more than 500 jobs are indirectly created by the mill. Additionally, the newsprint company continues to support the mill's future success, investing over $20 million into the facility. I want to see this mill thrive in the coming years, not close because tariffs chase away the already fragile market for newsprint. 1 It is important to note that the Grenada mill is also the largest Mississippi customer of the Tennessee Valley Authority. The partnership between TVA and the Grenada mill has been important for both, and losing the mill would undennine TVA's regional development goals. The Mississippi Press Association, and the 110 newspapers they represent, also oppose NORPAC' s petition. I would like to include for the record a letter they provided to me last year where they raise many concerns they have with these tariffs. I would also like to include various press articles on this matter. This is not a Mississippi-specific concern but a regional one. The Southeast is fortunate to have two of the five current producers of newsprint — Grenada, Mississippi and Augusta, Georgia. These two mills provide most of the newsprint that is needed to serve the region's current demand. As the ITC staff recognized in its report last fall, due to high transportation costs, newsprint is a regional market. Imports from Canada have almost no role in the southeastern market, and the ITC staff estimated they accounted for just 1.5 percent of the region's newsprint supply. The region is basically untouched by competition from Canada. Likewise, it is highly unlikely that NORPAC, located almost 3,000 miles away, would be able to become a major supplier of newsprint to the Southeast. Even though the region is not materially impacted by Canadian imports, the preliminary anti- dumping and countervailing duties have stirred up significant market disruptions that are leading to supply shortages and price hikes across the Southeast. For example, earlier this month the Vicksburg Post announced it would only print papers five days a week, no longer publishing printed papers on Mondays and Saturdays. They paper cites "rapid increases in newsprint costs driven by recent and substantial tariffs" as a key factor in its decision. Likewise, the Natchez Democrat has also cut back to publishing a print newspaper to five days a week, also pointing to the preliminary tariffs as the main reason. 2 Again, the harm is not specific to Mississippi. In Florida, the CEO of the Tampa-St. Petersburg Times, one of the largest regional papers in the Southeast, announced the tariffs will add $3 million in new costs, forcing them to lay off approximately 50 people. It defies logic that NOPRAC, just one mill located at the opposite end of the United States, can create this type of disruption and uncertainty. These are just two examples of what is taking place across the Southeast. My greatest concern is how these tariffs will hatin a major newsprint producer in my state, as well as the many small and rural newspapers who operate with small budgets and tight margins I hope that the ITC recognizes just how much damage these tariffs will do to our nation's economy. They will cause harm to domestic producers by destroying demand for an already mature newspaper market that is now in secular decline. These tariffs will not hurt newspapers alone. Commercial printers, book publishers, and the many retail stores that advertise using newsprint will also suffer. Together, these sectors represent some 600,000 jobs and are located in every state across the country. It is for these reasons that I urge you to reject these tariffs. 3 7/16/2018 Natchez Democrat to reduce print frequency I Mississippi's Best Community Newspaper Natchez Democrat to reduce print frequency natchez (https://www.natchezdemocrat.com/author/bniweb/) democrat By Staff Reports (https://www.natchezdemocrat.com/author/bniwebn ocom Email the author (mailto:[email protected]). Published 12:05 am Sunday, June 24, 2018 NATCHEZ — Beginning July 1, The Natchez Democrat will change its print publication days to Tuesday through Friday and Sundays, no longer producing printed editions on Mondays and Saturdays. The move to print five days per week will help the community's top media organization better align resources with its core mission: informing readers and guiding customers to our advertisers. The newspaper will continue providing news coverage through digital products, 24 hours a day, seven days a week. The decision has been considered thoroughly over the past several months and was ultimately driven by two key factors. ADVERTISING First, rapid increases in newsprint costs, driven by recent and substantial tariffs, have caused a nearly 30-percent increase in materials costs, with no clear end in rising newsprint prices in sight. This has driven similar changes in publication cycle across the newspaper industry. The two least profitable print editions of the newspaper will be eliminated, thus allowing realignment of resources to best serve our customers' needs and invest in continued quality journalism for our community. Second, the move helps The Democrat best match the printed newspaper's frequency with changing reader trends of more people accessing news and information from its website on computers and mobile devices. The newspaper's website, natchezdemocratcom is read by more than 10,000 people each day. "The change will allow our staff to focus more precisely on producing a quality community print newspaper on the days readers and advertisers have proven matter to them most," said Democrat publisher Kevin Cooper. "It also allows our news staff and sales team to invest more time and energy in development of our digital publishing products which continue to grow rapidly in use by our readers and advertisers. The Democrat's news staff will continue to produce stories and photos and publish those digitally in a 24-hour news cycle, seven days a week, as we have for a number of years. "Over the last decade particularly, some newspaper readers have migrated from print newspapers to newspaper websites for their primary news source," Cooper said. "Community newspapers, such as ours, are fortunate because we continue to have a healthy print newspaper audience, but reading habits have changed, too. Ours is the largest media company in the community that employs journalists and top marketing professionals. So we are fortunate that as media has evolved, the combination of print and digital reading and marketing preference aligns perfectly with the skills and know-how of our staff. Making this move positions our company to continue to thrive as the dominant media outlet in the Natchez area. "Our community media company has served our community since 1865, and we plan to continue doing so proudly for many, many years to come." The print newspaper will continue to be delivered to subscribers by independent contract carriers in most locations and by U.S. Postal Service in some areas. The subscription price of the printed newspaper, some of which have been delivered at a loss to the company for years due to high delivery costs in rural areas, will remain the same. Readers with questions about these changes are encouraged to contact us at: circulation@natchezdemocratcom or 601-445-3537. COPYRIGHT 0 2018, Mississippi's Best Community Newspaper Vicksburg Post reducing print publication frequency By Staff Reports PubPct.h8d 4 iJ unday, June 24, 201._ Beginning July 2, The Vicksburg Post will change its print publication days to Tuesday through Friday and Sundays, no longer producing printed editions on Mondays and Saturdays. The move to print five days per week will help the community's top media organization better align resources with its core mission: informing readers and guiding customers to our advertisers. The newspaper will continue providing news coverage through digital products, 24 hours a day, seven days a week The decision has been considered thoroughly over the past several months and was ultimately driven by two key factors. First, rapid increases in newsprint costs, driven by recent and substantial tariffs, have caused a nearly 30-percent increase in materials costs, with no clear end in rising newsprint prices in sight. This increase has driven similar changes in publication cycle across the newspaper industry. The two least profitable print editions of the newspaper will be eliminated, thus allowing realignment of resources to best serve our customers' needs and invest in continued quality journalism for our community.