Newsprint tariffs cost journalists their jobs

Published May 2, 2018

The latest lesson in the costs and benefits of tariffs comes from our very own industry: the print media. Specifically, the Commerce Department has imposed substantial new tariffs on newsprint from Canada, driving up newspaper production costs across the country. For papers already struggling to keep up in the Internet age, the impact can be devastating. To cite one example, the Tampa Bay Times announced April 18 that it must lay off around 50 employees, responding to what it says is a potential $3 million annual cost increase.

These tariffs are not part of the Trump administration's more highly publicized bids to play hardball with China or rewrite the North American Free Trade Agreement. Rather, they stem from a complaint, pursuant to long-standing U.S. law, by a single Washington state-based paper mill that claims it is a victim of "dumping" by Canadian paper producers, which allegedly benefit from unfair government support. A far more likely explanation for the American newsprint industry's woes is the historic decline of print media, but never mind. We're focused on the fact that 50 people at the Tampa Bay Times are losing their jobs so that 300 people at the Washington paper mill can keep theirs.

And their woes are illustrative. Similar anomalies are on the way in other sectors when, or if, President Donald Trump's proposed tariffs on steel and aluminum go into effect. Jobs protected in those industries will be offset by jobs lost in industries that consume steel and aluminum, or in export industries against which China and others retaliate, such as pork and soybeans. These are just the facts of life under protectionism. The beauty of free trade is that it lets the market, not government, allocate resources, according to neutral economic criteria, not subjective political ones, such as which paper mill has the ear of the Commerce Department. That is why the better answer to China's mercantilism was to surround it with a unified free market, through the Trans-Pacific Partnership. Trump thought otherwise, and here we are.

The tariff on Canadian newsprint is not yet permanent; if the underlying dispute between the two countries gets resolved by approximately Labor Day, it may be eliminated. In this very narrow sense, it may be defensible: Threatening, or even applying, tariffs may be necessary as a bargaining tactic when everything else has failed, though we're not sure all else failed in this case. What has never been clear about the Trump administration, though, is whether it views tariffs as bargaining chips, or as a permanent, strategic element of national economic policy. Right now, the United States' trading partners from Beijing to Berlin are exploring the possibilities of compromise and trying to discover what concessions from them Trump might accept.

There is still a chance to avoid more costly trade conflicts, and more collateral damage at places such as the Tampa Bay Times, but only if Trump can take "yes" for an answer when other countries offer it.