Newspaper Industry Grapples with Tariffs and AI’s Impact
By Brier Dudley, Editor of The Seattle Times Free Press
Various industries are vying for exceptions to the 25% tariffs President Trump placed on goods from Canada and Mexico. I’d argue that the newspaper industry has a strong case, though I may be biased. Canada supplies the majority of newsprint used in America, and there’s no easy way for the U.S. to quickly replace this production. A lengthy continuation of the newsprint tariff could lead to the closure of hundreds of newspapers.
Local newspapers have already made significant cuts in recent years. Small publications in rural and suburban communities have been particularly affected. Imposing a 25% increase on their most significant material cost, without a clear justification, could be the breaking point for some.
To weather this situation, some publishers will likely reduce the number of pages they print. “Right now, I think most of the smart publishers are reducing their page counts as much as they can,” explained J. Louis Mullen, a Wyoming publisher who operates six printing plants and over 40 weekly newspapers, including The Newport Miner in northeastern Washington. Mullen stated he’ll “do my damndest” to endure this and believes his products remain financially viable. Adding, “I’m worried about other newspapers that are in worse shape than I am, the ones that are already on the margin of just squeaking by.”
Mullen serves on the board of the National Newspaper Association, a trade group that requested in January that newsprint be exempt from tariffs. In a letter to congressional leaders, the NNA noted that rising newsprint costs force papers to raise subscription prices. “But these increases cause downward pressure on circulations, which makes the newspaper less valuable to advertisers and further depresses advertising income to the newspaper,” the association wrote.
The trade group continued that forecasting such multiplier effects might be challenging, “but small towns will feel the effects for many years if the tariffs continue because they will lose their local newspapers.”
Publishers could pursue legislation, similar to a new version of the Print Act introduced in 2018, to suspend taxes on “uncoated groundwood paper” while assessing the impacts on the printing and publishing industry. These tariffs were ultimately halted in 2018 by the U.S. International Trade Commission, which ruled that the U.S. industry “is not materially injured or threatened” by the import of Canadian newsprint, raising questions about the purpose of re-imposing them.
AI’s Impact on Traffic and Revenue
A recent report sheds light on the news industry’s fears concerning AI search engines and chatbots: They are not only scraping news content, but also taking web traffic necessary for publishers’ survival online.
Click-through rates are significantly lower on AI search engines compared to conventional Google search results, according to TollBit, a content-licensing startup. Their findings revealed that these rates are 91% lower on AI search engines than on Google search results. It’s even worse with AI chatbots: Their users are 96% less likely to click through to the websites of publishers whose work reported the news.
Publishers already receive less revenue than they should from news appearing in Google search results. TollBit’s report indicates that the shift from conventional search to AI applications, coupled with the fact that publications’ return is not in the form of traffic from AI applications, may negatively impact outlets making a digital news future.
Several Western countries are mandating tech platforms to negotiate content-usage agreements with news outlets, but comparable legislation has stalled in Congress and states.
The News/Media Alliance trade group asserts that while publishers utilize AI in their operations, they need AI companies to provide compensation for content, “for the long-term health of both of our industries.”
“By illegally scraping our content, repackaging it, and giving it to consumers without adequately directing them to our sites, AI companies are using our own content to undermine our businesses,” CEO Danielle Coffey said in a release, referencing TollBit’s report. “Without web traffic, news and media organizations lose subscription and advertising revenue, and cannot continue to fund the quality work that both AI companies and consumers rely on.”
New York-based TollBit plans to act as an intermediary that connects publishers and platforms with a content-licensing marketplace. It has secured $31 million from investors who see this as a potentially lucrative business.
TollBit’s analysis provides a clear case for why licensing deals are essential for publishers, given current online platform practices.
“These figures give an indication of the change in traffic levels publishers can expect if user queries move from conventional search to AI applications,” the report states. “They also starkly highlight the difference in the value for publishers when providing their content for use by AI applications versus conventional search. The return cannot be expected to come in the form of traffic from AI applications.”
Some publishers are already pursuing AI licensing deals individually and via other intermediaries like Dow Jones. I wonder if their work is still undervalued, especially if AI services will truly eliminate most search referrals to their websites and are weakening their industry’s leverage and ability to collectively secure fair compensation for both small and large organizations.
Additional TollBit findings contribute to the industry’s concerns. The report revealed significant increases in AI bots scraping websites, including a 6,768% increase in ChatGPT bots from the third to fourth quarters of 2024. Overall, scraping as a percentage of sites’ traffic more than doubled last quarter. OpenAI, the operator of ChatGPT, did not respond to a request for comment by deadline.
The report pointed out that websites are increasingly visited by AI bots rather than humans. Publishers are unable to monetize bot traffic because ads are not served to them and they don’t subscribe.
“For example, an AI agent may access five media websites in order to respond to a prompt that satisfies a user’s need without them needing to visit another online property,” the report said. “Prior to the advent of AI, this may have resulted in multiple (human) Google searches and visits to websites.” TollBit also found that AI crawlers frequently ignore publishers’ requests to stop scraping content. Publishers use the robot.txt instruction on websites to block crawlers; it’s the software equivalent of a stop sign. Yet the number of AI bots ignoring these stop signs grew more than 40% last quarter. Many are also hiding their identity; the number of “hidden scrapes” per website averaged 1.89 million in the quarter, TollBit found.
Perhaps tariffs on bots rather than newsprint are the answer.
Brier Dudley is editor of The Seattle Times Save the Free Press Initiative. Its weekly newsletter: st.news/FreePressNewsletter. Reach him at bdudley@seattletimes.com
