ARI SHAPIRO, HOST:
The actual paper that newspapers are printed on just got much more expensive. The Commerce Department has imposed steep tariffs on newsprint imported from Canada. On one hand, that's boosting profits for the five remaining newsprint mills in the U.S. On the other hand, it's pummelling the newspaper industry, which was already hurting. Frank Morris of member station KCUR has the story.
FRANK MORRIS, BYLINE: If you want to know the latest about the local hospital funding crisis, city hall or high school sports in rural Marysville, Kan., the Advocate has you covered.
SARAH KESSINGER: And this is our old press room back here. The press used to be here.
MORRIS: These days, publisher Sarah Kessinger contracts out for printing to save money. Income is down. And newsprint, the paper's second largest operating expense, that is way up.
KESSINGER: It's tough. It's getting tougher especially with these newsprint tariffs coming in to the picture.
MORRIS: Over the last few months, the U.S. Commerce Department has slapped tariffs of up to 32 percent on Canadian newsprint, raising prices nationwide.
KESSINGER: If that trend continues, it will really make our profits disappear.
MORRIS: And it's not just small papers. The Tampa Bay Times, for instance, is laying off around 50 people - responding to price hikes it claims will drive up its newsprint bill by $3 million a year. Al Cross, who heads the Institute for Rural Journalism at University of Kentucky, blames a single manufacturer.
AL CROSS: We have a complaint brought by one paper mill. It's just crazy. The industry is being turned on its head by the manipulation of trade laws.
MORRIS: That one mill is NORPAC in Longview, Wash. And Craig Anneberg is the CEO.
CRAIG ANNEBERG: We strongly disagree with the notion that the industry requires low-priced, subsidized newsprint from Canada to sustain their business model.
MORRIS: Anneberg says canadian newsprint mills benefit from cheap hydroelectric power and state-owned forests. He claims that some sell below cost in the U.S. - taking over most of the market, depressing prices and forcing layoffs at his mill.
ANNEBERG: We have some of the largest, fastest, most technologically advanced paper machines in the world. And if we couldn't compete - if we were having to shut down one of our machines, it looked like something wasn't right.
MORRIS: The newsprint business has been rough. Mark Pitts with the American Forest and Paper Association says U.S. demand has cratered - falling about 80 percent in the past two decades, shuttering newsprint mills on both sides of the border.
MARK PITTS: I think it's pretty clear that the predominant challenge out there isn't about imports. It's really about the declining demand.
MORRIS: Because more and more people read news on screens, not paper - and Pitts says the tariffs driving up newsprint prices will just accelerate that trend. Avis Little Eagle in the Standing Rock Indian Reservation agrees. She says tariffs are killing her paper, the Teton Times.
AVIS LITTLE EAGLE: It's like a stranglehold. I just feel like you're getting the life choked out of you. And it's like little by little, more and more, the life of the newspaper is leaving.
MORRIS: Little Eagle says most of her customers don't have internet access, so her printed paper is the only way they know what's going on with local government. But two weeks ago, she reached an impasse.
LITTLE EAGLE: I was like, oh, my God, I can't even print the paper this week. And so that's pretty darn close.
MORRIS: The Commerce Department will decide whether to finalize or lift the tariffs on Canadian newsprint by late summer. Meantime, high newsprint prices will keep cutting into newspaper profits and undermining demand for the paper in newspaper. For NPR News, I'm Frank Morris.
(SOUNDBITE OF STEVE REICH'S "ELECTRIC COUNTERPOINT-FAST (MOVEMENT 3)")
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