This Neiman Lab story, Newsprint tariffs are a Black Swan event that could speed up the death of U.S. newspapers, reports an effort to create tariffs that will massively raise the costs of newsprint. This is disturbing and suspicious.
Apparently a newsprint company, NORPAC, or Northern Pacific Paper Company owned by One Rock Capital Partners, has brought a claim against Canada that has led to potential tariffs on newsprint that could cause a lot of publishers, especially smaller ones, to go out of business or curtail their publishing.
"NORPAC claims that the Canadian government has subsidized the paper companies, creating an unfair arrangement that injured NORPAC's business."
One Rock acquired NORPAC in 2016, from Weyerhauser corporation and a Japanese company, Nippon Paper Industries, which together, ran the company. Nippon Paper reported they sold their share for $40 million.
The Forbes article reports that NORPAC has about 400 employees and that none of the other companies making newsprint in the US have advocated for tariffs. That makes sense, since a tariff could destroy the businesses that buy newsprint. What doesn't make sense is why the Commerce department would proceed with consideration of tariffs to protect a single company when the tariffs would adversely affect the print newspaper industry, with what congressional legislators opposing the tariff report to exceed 175,000 employees.
That's what makes this all very suspicious.
To add to the strangeness of this situation, Mitsubishi corporation is a partner with One Rock. According to Wikipedia, Mitsubishi is
"Japan's largest trading company" and "employs over 60,000 people and has seven business segments,including finance, banking, energy, machinery, chemicals and food." One has to wonder what would motivate Mitsubishi corporation to want to aid in causing the destruction of the print media in the United States.NeimanLab.org article points out,
"Black swan events -- like sudden oil shortages, 9/11 strikes, stock market meltdowns, volcanic eruptions, the Black Death of medieval Europe -- unexpectedly and sometimes catastrophically swoop in, causing, exacerbating, or proliferating great change, as author Nicholas Taleb wrote in his bestseller The Black Swan. "Most vulnerable to such natural or man-made disasters: those individuals or companies already ailing," he wrote. Exhibit A: the newspaper industry."
That one small company could change the economic balance of the newspaper industry seems crazy. But Neimanlab suggests that this move really could do disastrous, catastrophic damage to the print news industry. For example, they explain,
"The financial sustainability of the Black Press of America is now facing a catastrophic and a possible deadly impact, because of these new tariffs," Ben Chavis, CEO of the National Newspaper Publishers Association, wrote this week. His association represents more than 200 African American publishers.Donald Trump, the Koch brothers and many in the Republican party are hellbent on destroying the public's trust in the media and it is not a stretch to assume that some would like to see the media disappear altogether.
"During the past 191 years, the Black Press has survived, endured and overcome past firebombing and improvised explosive attacks, as well as other deadly manifestations of racial violence," he wrote. "Given that newsprint and labor account for most of the cost of running a newspaper, it is easy to see how jacking up the price of newsprint by more than 30 percent could spell the difference between these publications eking out a modest profit or going out of business."
In an era when the foundations of democracy and press meet daily new challenges in the homeland, we may encounter one of the hallmarks of non-democracies -- a scarcity of the very stuff that newspaper printing depends upon. Here, even as a president assails the press nationally as the enemy of the people, and as Congress members now use the same mantra against publications like the Fresno Bee, that's just collateral damage. Yet, it's damage nonetheless, with the same impact of such newsprint-restricting moves in Russia and Turkey: less newsprint, less news, fewer journalists.
Publishers now find themselves even more boxed in than they were six months ago. What will that prompt? More selling by independent publishers, for sure."
I've written this article to raise questions. Who benefits from destroying the print media? Are there ulterior motives for One Rock Capital Partners, NORPAC and Mitsubishi or any of the people associated with them?
Or maybe they are just predatorily using protection laws, as Steve Forbes is cited as telling the Wall Street Journal, by Neimanlabs:
"NORPAC's petition is an example of protectionist cronyism. Among U.S. paper producers, the company is conspicuously alone in its petition for protective tariffs."
Pardon me if I am not satisfied with an explanation that just an attempt to make profits is what is at work here.