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Leaders warn of paper tariff's local impact

Leaders warn of paper tariff's local impact

Quad/Graphics CEO hosts senator at Saratoga Springs plant
Leaders warn of paper tariff's local impact
U.S. Sen. Charles Schumer, D-N.Y., speaks to journalists Thursday at the Quad/Graphics printing plant in Saratoga Springs.
Photographer: John Cropley/Gazette Business Editor

SARATOGA SPRINGS — The local impact of international trade squabbles was highlighted Thursday at a printing plant facing higher prices for the paper it uses in great quantity.

The Saratoga Springs facility of Wisconsin-based Quad/Graphics hosted a visit from U.S. Sen. Charles Schumer, D-N.Y., in which he repeated his call for the Trump administration to rescind the duties it has imposed on uncoated groundwood paper imported from Canada.

This type of paper is used for newspapers and the advertisements inserted into them, and the struggling news industry can ill afford higher costs on its biggest single commodity purchase, Schumer said.

He predicted some of the 17,000 employees at New York’s daily newspapers would be laid off as a result of the tariff, which was imposed on a preliminary basis in March and is slated to become permanent in August.

“If this tariff goes into effect, this company will lose jobs,” Schumer said about Quad/Graphics.

The printing industry giant employs roughly 800 people at the 1.1-million-square-foot Saratoga Springs plant, where it prints such familiar magazines as Entertainment Weekly, People and Sports Illustrated under contract. When it was built in 1985, it was the first Quad/Graphics plant outside Wisconsin; today it’s one of seven megaplants among the 57 print shops the company operates nationwide.

About 20 percent of the workforce at the Saratoga Springs plant is involved in printing on uncoated groundwood paper.  

Chairman, CEO and President Joel Quadracci joined the senator in speaking against the import duties Thursday.

“The problem is, the paper bill is a lot bigger than the printing bill,” he said. “We can’t do enough to offset that, so the customer just prints less and shifts that dollar somewhere else, and typically that dollar doesn't come back.”

Quadracci presented the tariffs as a problem more for the company’s customers than for Quad/Graphics itself. He made no mention of any layoffs Schumer warned of, and in fact the Saratoga Springs plant is getting ready to hire 60 part-time and temporary employees for its seasonal surge. 

He said the company has survived years of challenges and contraction as the print media compete with digital media by beating competitors on quality and/or price. 

The irony, Quadracci said, is that the tariff will harm the printing and newspaper industries but provide little boost to the papermaking industry it is designed to help.  There simply aren’t many mills left in the United States that can produce uncoated groundwood paper for newsprint, he said.

“Part of the challenge, and why Canada’s so important, is a lot of the newsprint capacity we have in the United States was shuttered over time.”

No one, he said flatly, is going to build a half-billion-dollar mill and hire people to make newsprint as a result of this new tariff.

Schumer, Quadracci and others on Thursday said the tariff was imposed at the request of one paper company: North Pacific Paper Corporation of Washington state. 

NORPAC announced in May it is hiring 50 full- and part-time employees thanks to the tariff.

Diane Kennedy, president of the New York News Publishers Association, said some newspapers in the state have reduced the number of pages they print but she’s not aware of other cutbacks.

“I haven’t heard about any job cuts yet,” she said.

Newsprint costs have increased already and would increase more if the tariff is finalized, Kennedy said.

“We’re kind of standing on the edge of a cliff waiting to see if we’ll be pushed off,” she said.

There has been considerable antipathy on the part of President Trump and his administration toward the news media. Kennedy said she doesn’t know if that played a part in imposing the tariff, but she said she has seen zero sympathy about its effects.

“There doesn’t seem to have been a good-faith effort on the part of the administration to recognize impact on newspapers,” she said.

Daily Gazette Publisher John DeAugustine said The Gazette is weathering the situation well so far, thanks to a long-term supply contract.

“The Daily Gazette buys its newsprint from a U.S.-based company,” he said. “So the tariffs have not impacted us nearly as much as companies that are buying from Canadian-based companies. All that being said, we will be paying 15 percent more for newsprint by the end of this year than we were last year.”

U.S. paper suppliers are raising prices because their Canadian competitors’ products suddenly cost more, DeAugustine said.

Schumer praised the president for imposing a massive new round of tariffs on an array of Chinese goods even as he assailed the tariff on Canadian newsprint.

“Tariffs are supposed to help jobs in America; this [newsprint] tariff hurts jobs in America, plain and simple. I believe in going after China. I think President Trump is doing the right thing on China. But China’s not Canada. You don’t treat the two countries the same.”

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