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

Cornelia Mascio
Ottobre 19, 2018

US officials say the growth of transactions on the internet is facilitating a high level of counterfeit goods shipped to the USA, as well as narcotics and fentanyl, with the aid of the lower shipping costs. Trump said the U.S.is prepared to withdraw from the treaty if negotiations are not successful by early 2020. USA 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.

The shipping rate under the postal treaty can be a fraction of what it costs to send the same item from the U.S.to China - making returns very hard - and it can be lower than what it costs to ship an identical product within the U.S.

The National Association of Manufacturers (NAM) praised the decision on Wednesday, calling the treaty an "anti-US manufacturer subsidy".

The US' National Association of Manufacturers called the treaty "outdated" and said it "contributes significantly to the flood of counterfeit goods and risky drugs that enter the country from China".

"We regret the U.S. decision to withdraw from the Universal Postal Union", Lu told reporters at a daily press briefing.

Also Thursday, China's politically sensitive yuan sank to a 22-month low against the dollar after the U.S. Treasury declined to label Beijing a currency manipulator.

Giving an example, the official said a one-pound package costs domestically about $10 to $13 for a United States business or manufacturer to send, whereas the Chinese mailer, for the last mile, and same distance, one would reimburse about $2.50. "According to the union's rules, members will have a year to renegotiate new terms before the withdrawal becomes permanent". It also comes amid an escalating trade dispute between Beijing and Washington that has resulted in US imposition of tariffs on about $250 billion worth of Chinese goods and the Chinese retaliating with similar punitive taxes on about $110 billion in American products.

"He (Trump) wants that US stays ahead, economically and is not taken over by China".

The officials, who briefed reporters on condition of anonymity, said postal rates would not change for at least six months, and that the USA would prefer to stay inside the union's system.

Derek Scissors, a resident scholar at the American Enterprise Institute, a Washington-based conservative think tank with close links to the Trump administration, said Trump and Xi "are going to have a meeting unless something happens". The biggest winners could be shipping carriers such as UPS. Trump had threatened to impose tariffs on the remaining $267 billion of Chinese imports if there was any further retaliation by China.

Trump claimed in an interview to Fox News on October 11 that the tariffs had a big impact, that the Chinese economy had been hit substantially and that he could do a lot more to China.

The action by the White House has been attributed by many sources as a response to UPU rates favoring other countries, with China singled out most frequently.

Xin Hua, research director at the Shanghai Institute for European Studies, told Sixth Tone that while there may be some impact on trade and communication between the two countries as a result of the U.S.'s latest move, it's unlikely to be substantial.

Collier raised the possibility of municipal government defaults, which he described as "more or less unheard of in China". "Whether Trump's letter bomb-shell will ultimately be good or bad news for United Kingdom and USA traders remains to be seen".

"Trump is taking the right approach, by waiting for China to enter a truce on trade war talks", the CCTV editor suggested.

"Chinese sellers on EBay and other platforms may disappear, or at the very least they will not find it so easy to sell to Americans anymore", said Gary Huang, chairman of the supply chain committee for the American Chamber of Commerce in Shanghai. 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.

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