It’s been a dizzying few months for anyone paying attention to the continually changing tariff drama. One group with a vested interest in the outcome of this standoff are book publishers. Tariffs on most types of books printed in China went into effect on September 1, while Bible, religious, and children’s book publishers wait to see whether planned tariffs on these books go into effect in December. Here’s the latest on the tariffs and the potential effects on the industry.
The drama so far
The trade war with China began more than a year ago, although the early rounds of tariffs went mostly unnoticed to the average American and most businesses. In the spring, officials announced additional targeted industries and products that would be taxed beginning in the fall. This round of tariffs did not go unnoticed. They hit small- and medium-sized businesses that rely on China for production or imports of essential materials. Books were on the targeted list and it’s causing some angst among U.S. book publishers.
A delegation of book publishers went to Washington to argue that book tariffs will significantly impact the book publishing industry, academia, and consumers. They said it limits access to information and freedom of speech. They also declared it goes against the tradition of not imposing tariffs on educational, scientific, and cultural materials. Although the planned 15% tariffs went into effect on September 1, the stance on books was loosened somewhat. In response to religious concerns, imports of Bibles and religious materials were removed from the list of taxable products, as well as children’s books. However, the reprieve may be short-lived. Unless there is intervention, taxes on Bibles and children’s books will go into effect on December 15, 2019.
Impact on book publishers
The recent and upcoming tariffs are meant to encourage American companies to manufacture their products in the U.S. Because of the way the book industry has evolved over the past couple of decades, publishers, as a whole, are outsourcing much of their printing and production to China. This is especially true of Bible and children’s book publishers because of the specialty papers used and specific production processes unique to these types of books that China has fully developed. While some printers continue to add equipment, capacity, and have the ability to print on lightweight paper that religious books are known for (such as Sheridan), the capacity to take on all the overseas print needs of these publishers does not exist in the U.S., so publishers have little choice but to pay the tariffs. The U.S. book publishing industry is concerned that the tariffs will lead to higher book prices for consumers and even force some publishers and book sellers out of business.
Although the imposed and soon-to-be-imposed tariffs will certainly affect book publishers in the short term, it’s in the longer term that the full impact will be felt. Will publishers see the tariffs as incentive to bring their printing needs back home to the U.S. and enjoy the benefits of reduced transit times, shipping costs, and environmental impacts? Will domestic printers be able to handle the increased workload? Will they invest in the equipment necessary to produce these specialty books?
Until domestic book printing is feasible for all their publishing requirements, book publishers will need to decide how best to handle the tariffs.
The book publishing industry will continue to petition for removal of tariffs on books, but it also must understand that one goal of a tariff is to bring manufacturing processes back to the U.S. If the tariffs encourage the growth of the U.S. book printing infrastructure, U.S. publishers will likely benefit in the long run. In the meantime, individual publishers must be prepared to manage the tariffs in a way that is most appropriate for them and their customers.
Contact your Sheridan representative for a consultation.