The cost of paper for newsprint is up 26 percent due to a tariff threatening an already struggling newspaper industry, according to U.S. Senate Minority Leader Charles Schumer.
An August deadline looms on whether the tariff imposed in January — and increased in March — will be made permanent. Schumer is pressing U.S. Commerce Secretary Wilbur Ross to reverse course on the duty that escalated the cost of specialty paper from Canada.
Farmers are battling financial losses. Home builders and home buyers — all are feeling the effect of tariffs. Millions of dollars are planned for school capital projects, but costs may be rising.
This summer, with prime time for big projects at schools across the Rochester and Finger Lakes area taking place, a price jump in aluminum and steel is forcing decisions by school boards and taxpayers about what to do.
Scale back or spend more money?
A slew of market factors are influencing the price of everything from milk to masonry, and now, with new trade actions like tariffs, the question is, “What role do tariffs play in rising costs for local projects and goods and what’s at stake?
Hometown newspapers at risk
The tariffs on newsprint are a response to a complaint to the U.S. Department of Commerce from one hedge fund-owned paper producer in Washington state. The Northern Pacific Paper Corp., owned by a Wall Street firm, argues its Canadian competitors are taking advantage of government subsidies to sell their product at unfairly low prices.
Schumer said he isn’t opposed to certain tariffs meant to level the playing field, such as new tariffs on Chinese imports. But the case of paper from Canada is different.
“There is no domestic producer of this specialty paper in the Northeast or Midwest, and the product is expensive to ship,” Schumer said. So producers here are forced to import this paper and the tariffs are driving up costs for newspaper publishers and the whole supply chain, he said.
In upstate New York, community newspapers account for 17,000 jobs at 721 publications serving 15 million readers, according to Schumer.
Rick Emanuel is president and publisher of the North Atlantic Division for GateHouse Media, the parent company of The Chronicle-Express in Penn Yan, Daily Messenger in Canandaigua, The Leader in Corning, Steuben Courier-Advocate in Bath, The Evening Tribune in Hornell, Observer-Dispatch in Utica, and many other weekly and specialty publications in Yates, Ontario, Steuben, Wayne, and Livingston Counties of New York State.
Asked about the impact of the tariffs, Emanuel stated in an email: “Rising paper costs are placing a huge burden on properties, especially small, hometown papers. Next to staffing, newsprint is our second largest expense. If the costs continue to rise at the levels that they have been over the last six months, everyone will have to look at expense reductions to compensate. GateHouse Media owns 684 publications across 38 states.
“This could come at the cost of jobs — affecting already reduced staffing levels. We hope that Senator Schumer’s efforts can help an industry that has long been the champion for taxpayers in their respective communities.”
Farmers’ $12 billion ‘Band-Aid’
President Donald Trump this past week said $12 billion in aid is headed to farmers, a reaction to the fallout from the president’s own tariffs.
In a statement, New York Farm Bureau President David Fisher said the “$12 billion plan to support farmers caught up by the retaliatory tariffs slapped on U.S. agricultural products recognizes the dire need for some relief. Farmers are already facing the financial consequences of the trade barriers. Commodity prices are once again dropping at a time when farm income has been at its lowest point in years.”
Farmers in the Finger Lakes have taken a hit, said John Sorbello, state Farm Bureau regional director for Ontario, Wayne, Yates, Cayuga and Seneca counties.
“A lot of folks are hurting right now,” said Sorbello, a former dairyman turned nursery stock and vegetable farmer who lives in Manchester. Mentioning a long period of depressed milk prices and other obstacles local farmers face, “the last thing these guys needed was taking it on the chin like this,” he said.
While farmers aren’t turning away from an influx of government cash, they say it’s not addressing the root cause of the problem.
“The $12 billion is a Band-Aid and what it amounts to remains to be seen,” Sorbello said.
Fisher said in the end, what farmers are asking for are open markets to sell the quality products they produce.
“We hope that the trade matter will quickly be resolved because short-term relief can only go so far when farmers need to plan for the long term,” he said.
Farmers really depend on trade today, said Sorbello. By value, about one-quarter of the agriculture industry depends on exports.
With things “mixed up in politics or tariffs, there is a lot of uncertainty out there,” said Sorbello.
“When countries find they get a better deal buying from countries other than the United States, farmers here lose those markets,” Sorbello said.
Once lost, “it could take years trying to rebuild those markets,” Sorbello said. The longer this trade trouble plays out, “the worse we may be,” he added.
The aid plan borrows money from the U.S. Treasury to pay producers of soybeans, sorghum, corn, wheat, cotton, dairy and hogs.
“The Trump Tariff Aid plan draws on the financial resources of a program known as the Commodity Credit Corporation (CCC) and Section 32 funding,” said Jim Wiesemeyer, Pro Farmer’s Washington policy analyst, in a July 24 AgWeb report.
“The initiative does not authorize any new money and thus does not need approval from Congress. But U.S. taxpayers will see deficits go still higher,” he said.
Overbids plague schools
Penn Yan and Dundee Central School District voters have approved capital projects, and the Penn Yan Board of Education will be approving construction bids tonight, Aug. 1. Superintendent Howard Dennis says school officials opened bids 10 days ago that were within budget. “We were very concerned about the rising costs. We worked very closely with our architects and construction managers to offer alternates and to take steps to give the firms bidding, every opportunity to come in within the budget.”
Voters in the Naples School District head to the polls Sept. 11 over whether to approve an additional $2.35 million for a $7.7 million capital project they approved in May 2017.
It’s not certain the full additional funds will be needed, but it’s pretty likely, according to Naples Superintendent Matt Frahm.
“After speaking with a number of experts in the field and reviewing area school projects that have come in over bid in the past year, we believe that the costs for construction will come in significantly higher than what our community members have authorized us to spend,” Frahm told the Daily Messenger. “While this is disappointing, we have no control over a market that is saturated with work, a regional shortage of labor, and rising prices involving aluminum, oil and shipping.”
Districts across the state are faced with similar dilemmas.
Fortunately, in some cases like Naples, the additional funds don’t require a tax increase. But the situation has officials scrambling to reassess projects, inform and win over taxpayers, schedule votes and struggle with how to budget for future building improvements.
“From everything we hear, costs will continue to rise,” said Mitch Ball, assistant superintendent of business at Naples.
Other districts across the region have seen their projects overbid. They include North Rose-Wolcott, by $3.9 million; Honeoye Falls-Lima, by $3.17 million; and Churchville-Chili, by $2.3 million. Wayland-Cohocton could need an additional $2 million and Gananda needs about $600,000 more.
How much is due to tariffs?
Todd Labarr is president of Watchdog Building Partners, an upstate New York building management company.
Labarr said the biggest factor driving the price hike is a shortage of construction workers and skilled tradesmen. “A labor shortage is the biggest piece of it,” he said, adding that combines with other factors that include material costs.
“Tariffs have affected the cost, with a fear factor,” Labarr said. He explained how rising costs for construction materials and uncertainty about the future play into the equation.
Asphalt is one example of the price spike, which he estimated at about 25 percent.
“With asphalt there have been four increases in cost since spring,” he said. “A year ago there were maybe one or two increases.”
Includes reporting by Gwen Chamberlain