USA plans to exit old treaty on mail rates

Marco Green
October 21, 2018

Trump put tariffs on half the Chinese goods that enter the United States every day.

The heavily discounted shipping rates were meant to stimulate flagging economies, but the Trump administration says China's status hasn't been updated since it became an e-commerce powerhouse over the past decade, clocking about $354 billion in annual sales.

The administration says the U.S. Postal Service is losing money under the current worldwide agreement and that American businesses are being undercut by Chinese companies because they can ship goods to the United States on the cheap.

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 US and China by putting a finger on the scale in favor of Sino-based sellers.

U.S. president Donald Trump is distancing the United States from global multilateral organisations and accompanying policies that he says hurt USA interests.

While American delivery companies seem to welcome the Trump Administration's bold move, investors in their Chinese counterparts may be getting nervous.

The Postal Service applauded the action Wednesday.

United States manufacturers applauded the move. According to the U.S. Census Bureau, Americans bought $505 billion in goods from China in 2017 while exporting just $130 billion worth of products to China - a trade imbalance the American president hopes to rectify. Plus, the president wants to end a treaty that doesn't make sense.

The group said the discounts amount to a subsidy for Chinese shippers that cost the U.S. Postal Service $170 million in 2017.

The Universal Postal Union or UPU, administered by the United Nations from an office in Bern, Switzerland, was created in 1874. In order to leave the pact, the United States will have to wait a year, according to treaty's rules. The United States plays a major role in that union.

The move against the UPU represented another USA departure from multinational organizations and treaties, after it pulled out of the Paris climate accord, the UN Global Compact on Migration, the UN culture and education body UNESCO, the UN Human Rights Council, as well as the Iran nuclear deal. But small packages from China to the United States increased by 182 percent between 2011 and 2012.

In his latest attempt to battle the U.S.

Other reports by Click Lancashire

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