Bad News For Newspapers

As if the U.S. newspaper business didn't have enough trouble coping with decades of lost readers and advertising dollars. An escalating trade dispute with Canada is poised to make every edition cost a lot more to publish, according to a story at AdAge.

Newsprint prices have jumped since October to a three-year high and may keep increasing if, as expected, the administration of President Donald Trump slaps duties on imported paper from Canada next month. America's northern neighbor accounts for about three quarters of what gets used in the U.S., from the Wall Street Journal to local news providers.

The higher costs will squeeze U.S. newspapers already coping with 28 straight years of declining circulation and increased competition from the internet. Many publications have closed as print-advertising revenue plunged 80 percent since 2005. The New York Times Co. alone spent $72 million last year on newsprint, or 5 percent of operating costs. But the biggest impact may be at the hundreds of smaller papers with fewer financial resources.

A metric ton of newsprint in the U.S. cost about $570 as of Dec. 26, according to FOEX Indexes Ltd., a provider of global pulp and paper data. Prices are the highest since December 2014 and are up 4.8 percent since Oct. 3, after the U.S. began investigating imports of Canadian newsprint.

Prices will probably rise even further in 2018 because it's "pretty much a guarantee" that the U.S. will impose preliminary countervailing duties of 15 percent to 25 percent, said Kevin Mason, managing director Vancouver-based ERA Forest Products Research.

If duties are imposed, Canadian newsprint exporters will have to boost prices, causing immediate hardship for smaller U.S. publications that operate on thin margins, said Paul Boyle, senior vice president of public policy at the Arlington, Virginia-based News Media Alliance. The group represents almost 2,000 news organizations from the Journal Star in Peoria, Illinois, to the New York Times.