Owner and brewer Dave Sheets operates machinery filling cans with beer at Ironmonger Brewing in Marietta. The recent round of tariffs has raised costs for beverage companies in Georgia. HYOSUB SHIN / HSHIN@AJC.COM
Photo: The Atlanta Journal-Constitution
Photo: The Atlanta Journal-Constitution

Opinion: When trade skirmishes hit home

On Friday’s front page of The Atlanta Journal-Constitution, reporters Tamar Hallerman, our Washington correspondent, and Michael Kanell, a business reporter based here, wrote about Ironmonger Brewing Co., a Marietta-based company.

Co-owner David Sheets worries about a trade war. Why? Tariffs on aluminum and steel might drive up the cost of the cans the company uses.

“If we get a tariff that drives the 11-cent can up to 15 cents a can, that’s trouble,” Sheets said. “I am not going to be able to raise my prices to cover for that. I will have to absorb the cost.”

“The margins we have now are about 8 or 9 percent, and with these tariffs, you want to take that to 2 or 3 percent,” Sheets said. “How do I save enough money to hire more people? How do I have enough to give my people raises?”

This kind of story represents some of the most important work that we do. Amid all of the commotion, over-the-top rhetoric and political divisions, our job is to get to the real story. To let you know how policies coming out of Washington are playing out in the real lives of Georgians.

We want to give you the clearest possible picture of how international trade fights could affect the economy and jobs close to home.

That way, you can make up your own mind about where you stand.

In the trade policy debate, one issue is hitting very close to home for us.

Let me explain.

As you probably know, President Donald Trump has been vocal about trade policy, calling for changes in the deals and treaties the United States has with countries around the world. His view is that too many existing trade deals are bad for the United States and cost our country jobs.

Of course, when the issue is framed that way, it’s tough to disagree with the President’s view. After all, it’s no secret that American aluminum and steel manufacturers have struggled against foreign competition. Shouldn’t they have an advantage in supplying the cans to a small, Georgia-based brewing company?

Not to worry, I’m not going to launch into a long, boring explanation of international economics and trade. Let’s just agree that it’s not simple.

Many Georgia businesses benefit from open trade with other countries. Other businesses suffer.

Which brings us to tariffs that affect newsprint — the paper that we use to make the newspaper you’re holding.

Back in January, the Commerce Department announced that it would hit Canadian newsprint manufacturers with a tariff.

“President Trump made it clear from the beginning that we will vigorously administer our trade laws to provide U.S. industry with relief from unfair trade practices,” Commerce Secretary Wilbur Ross would later say. “(The) decision follows an open and transparent investigation in accordance with the applicable laws, regulations, and administrative practices that ensured a full and fair review of the facts.”

Again, it would be easy to get folks sitting around a dinner table to agree with Ross’s statement.

But there’s more to it.

First, the Commerce Department apparently made this decision, affecting the cost of paper for thousands of newspapers, based on the complaint of one company, North Pacific Paper Co., which is based in Washington state and owns just one paper mill. Oh, and the company is owned by a New York-based hedge fund, according to the News Media Alliance that represents the newspaper industry.

“This is an example of one private investment fund trying to use the government to boost its bottom line — at the expense of an entire industry,” said David Chavern, president and chief executive officer of the News Media Alliance. “Anyone who believes in limited government should find this offensive.”

The News Media Alliance also points out:

  • Other U.S. newsprint mills haven’t supported the tariffs because of how hard they will hit newspapers — including cutbacks to pages in newspapers that would drive down the demand for paper.
  • With less print advertising, newspapers use less paper, so the market has been hit by a decline caused by business forces, not trade policy.

This increased cost of paper has increased our costs at the AJC, and as a business we have to consider how to respond. That will affect readers and advertisers — all because of one paper mill out West.

Congress is considering action, and the move is bipartisan. So even politicians — who we can be hard on — see that this is a bad policy.

I met with Georgia Sen. Johnny Isakson last week, and he immediately raised the issue. He was among 19 members of Congress who testified before the U.S. International Trade Commission the day before we met.

“Of all the news media there are, there’s none that delivers a more quality insight into the issue of the day than local newspapers,” Isakson said.

He called the tariffs “a tremendous threat to the First Amendment, my ability to express myself and my ability as a businessman to sell a product.”

“I’m afraid these market increases would affect the markets in a negative way, the information I’m able to read in a negative way, and the dissemination of [information for] the public good in a negative way. None of which are good for the American people or American business.”

Isakson is among a group of senators who have introduced legislation that would suspend the tariffs.

One group representing the printing and publishing industry said these tariffs affect 600,000 jobs in the United States.

We know the tariffs affect us, and our ability to provide your newspaper. We appreciate your support as a subscriber and reader. And I hope you’ll support us in this fight against tariffs on newsprint.