Donald Trump moves to leave postal union in latest jab at China

Marco Green
October 18, 2018

Wednesday's announcement is the latest move by the Trump administration to remove the United States from multi-lateral organizations and agreements that it believes disadvantage the country.

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

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 worldwide postal rates.

Current shipping rates will continue in force as it takes a year for a country to withdraw from the agreement. Administration officials are still weighing whether Trump will meet with China's president, Xi Jinping, in Argentina next month.

But the U.S. is pushing its own WTO reform proposal - and has sought backing from Japan and the European Union - to stop China claiming special treatment as a "developing" nation, and to impose restrictions on the country's state-owned enterprises. The treaty was last modified in 2016 to raise some shipping costs on Chinese exports.

Consequently, U.S. consumers often purchase Chinese goods offered with free shipping. "Moreover, while USPS loses an estimated $1 on every small package that arrives from China, outbound mail of American exporters is charged at well above cost".

The move to withdraw from the UPU, now a part of the United Nations family of organizations, is the latest one by Trump against the established worldwide multilateral system of treaties and agreements the US president blames for undermining American competitiveness.

China's Ambassador to the U.S. Cui Tiankai told "Fox News Sunday" host Chris Wallace that there is no trade war between the two countries, but then seemed to contradict himself by claiming America started it.

USA officials say the growth of transactions on the internet is facilitating a high level of counterfeit goods shipped to the US, as well as narcotics and fentanyl, with the aid of the lower shipping costs. While the agreement is meant to give Asian and African countries incentives to develop their economies, China has used the discounted rates so effectively that it now accounts for 60 percent of the packages sent to the U.S.

The subsidy cost the U.S. Postal Service $170 million last year, according to NAM, a figure it says is growing at a rate of almost 40 percent each year. A 2014 study, cited in a Postal Service analysis of the issue, estimated that discounted shipping cost industrialized nations as much as $2.1 billion a year in aggregate.

"This outdated arrangement contributes significantly to the flood of counterfeit goods and unsafe drugs that enter the country from China", NAM President Jay Timmons said.

"Manufacturers and manufacturing workers in the United States will greatly benefit from a modernized and far more fair arrangement with China", Timmons said in a statement.

But the changes could have an even bigger impact on small retailers who have found themselves outgunned and undercut by Chinese competitors. "How can my government be subsidizing China and driving me out of business?"

Other reports by Click Lancashire

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