Tariffs like those the Trump administration is imposing on imports invite trade wars — in this case, foolishly, with U.S. allies and neighbors.
Last Thursday’s rollout of new tariffs on steel and aluminum from the European Union, Canada and Mexico have us baffled. One reason: Friday’s federal employment report, reflecting strong May hiring and unemployment at an 18-year low of 3.8 percent, speaks to a growing economy that tariffs threaten to undermine.
The Tribune has a long record of supporting free markets and opposing trade barriers. Open competition enables a dynamic economy that creates jobs and prosperity; government intrusion, by contrast, rarely leads to efficiency. So a federal tariff with repercussions close to home is especially vexing.
Trump’s Commerce Department has picked a trade fight with Canada over that country’s newsprint exports to the U.S. That means higher costs to American newspapers. Fortunately, some members of the U.S. Senate want to end this needless confrontation. If you care about the future of newspapers — as we obviously do — we hope you’ll look at the facts and support efforts to resolve the mess. In this particularly odd case, the Commerce Department is helping one U.S. manufacturing firm at great cost to an entire national industry.
The brief background: Commerce Department has added anti-dumping duties of up to 32 percent on newsprint and some other paper products from Canada. The agency says these products benefit from unfair Canadian government subsidies. U.S. publishers retort that Commerce is misreading the state of the newsprint industry, and using government power to benefit a single paper mill owner in Washington state. That one mill owner, North Pacific Paper, had asked Commerce to punish the imports from Canada. No other U.S. newsprint mills supported North Pacific’s claim, according to the News Media Alliance, an industry group.
The American newsprint industry is in decline as more Americans read newspapers’ digital editions. There isn’t much of a domestic newsprint industry to protect. Newsprint is also a regional business: Publishers and other users of printed products in the Midwest and East import their newsprint from Canada because there are no longer U.S. mills operating in their regions. And no one is clamoring to invest millions to build new mills on this side of the border.
This is an example of trade that was working as it should: Canada, blessed with forests and efficient paper producers, selling to an eager American market. But now because of pressure from one firm, publishers are seeing their costs skyrocket. Jobs are at stake.
The U.S. government is collecting duties at the border and newsprint prices in the U.S. are up 20 to 30 percent. But the situation still appears fluid. The International Trade Commission will conduct a final investigation, which will include a public comment period and hearings. Meanwhile, a group of Democratic and Republican senators have introduced legislation that would suspend the tariffs and require Commerce to review the economic health of the American printing and publishing industries.
Trump’s skeptical, inconsistent views on trade make our heads spin. While claiming to embrace free and fair trade, he’s been quick to threaten sanctions in certain industries, even against close trading partners. But he’s also pulled back from the brink in some circumstances. In the case of newsprint tariffs, lawmakers have an opportunity to reverse a bad decision. We’d like to see more members of Congress get involved.
Editorial courtesy of The Chicago Tribune Editorial Board and the Associated Press.