The Next Victim Of U.S.-China Trade War — International Postage Treaty

The Next Victim Of U.S.-China Trade War — International Postage Treaty

President Donald Trump announced that the USA would withdraw from the Universal Postal Union, a 192-country treaty that helps to set worldwide postage rates.

"If negotiations are successful, the administration is prepared to rescind the notice of withdrawal and remain in the UPU", according to the statement.

White House officials said the move is not aimed at China specifically, noting that certain European countries such as Germany and France also benefit from what they called unfair global postal rates. Lower rates are created to help poorer countries manage the costs.

Consequently, U.S. consumers often purchase Chinese goods offered with free shipping.

A historical factor that has informed USA scholarship contributing to deep-rooted mistrust and irreconcilability between American and Chinese geopolitical interests is Beijing's isolation from world politics during much of the Cold War era and its denial of membership in the United Nations until 1971.

MCM Musings: Say what you will about Trump, but the Universal Postal Union agreement is ripe for upending as it has contributed to the significant trade imbalance between the USA and China by putting a finger on the scale in favor of Sino-based sellers. The agreement - and another one that China and the US signed in 2011 - has essentially given Chinese merchants a $170 million annual subsidy to ship products directly to American homes. US companies can pay two to four times that amount to ship a similar package from Los Angeles to NY and much more for packages sent to China.

While official talks between Beijing and Washington have been on hold because of the trade tensions, US Treasury Secretary Steven Mnuchin and China's central bank governor Yi Gang agreed that Beijing would not engage in competitive devaluation of its currency to support its exporters.

"This outdated arrangement contributes significantly to the flood of counterfeit goods and unsafe drugs that enter the country from China", Mr. Timmons said. The Postal Service is a money pit, and no one knows how to turn it around.

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The United States intends to withdraw from the International Postal Union with 192 countries.

Editor's note: On Sunday, CBS broadcast an interview with US President Donald Trump in which he said China does not have sufficient ammunition when talking about the ongoing trade war.

Small businesses, commercial shipping companies and US manufacturers have said the postal program gives Chinese vendors a significant advantage, especially on small, high-value items including electronics and clothing.

It was also adopted against the backdrop of escalating trade disputes between Beijing and Washington that led to the imposition of USA duties on imports from China at a cost of approximately $ 250 billion, to which Beijing responded with similar tariffs on American goods worth $ 110 billion.

That's according to two administration officials who spoke on the condition of anonymity because they weren't authorized to speak on the record. The biggest winners could be shipping carriers such as UPS. It now represents 192 member countries, including the US. Small businesses within the USA who manufacture at low enough quantities to get their components/raw-materials shipped under the e-packet rates will also see a hit. "How can my government be subsidizing China and driving me out of business?" The move would escalate a trade dispute with China. The Chinese economy puts the US economy to shame, according to global economists.

He believes that Trump "will keep raising the stakes until Chinese President Xi Jinping makes a phone call to Trump and asks him how to resolve it so they can both sign a win-win trade deal". A 1-pound package that costs the USPS about $10 to deliver can be mailed from China for just $2.50, per White House numbers. The Trump administration promised an energetic bilateral approach to dealmaking instead, but for months and months, no news about bilateral trade deals being made across the Pacific emerged.

Information for this article was contributed by Glenn Thrush of The New York Times; by Justin Sink and Alyza Sebenius of Bloomberg News; by Danielle Paquette of The Washington Post; and by Zeke Miller, Martin Crutsinger and Paul Wiseman of The Associated Press.

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