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US buyers may have to bid farewell to the $ 1-dollar yoga arrangements with free delivery from Chinese sellers who appeared on EBay and other e-commerce platforms after the latest salvo in President Donald Trump's trade war.
Trump's order from the US Postal Service to withdraw from an obscure postal treaty with 192 countries threatens to strike US buyers accustomed to trading on platforms such as Ebay Inc. and Amazon.com Inc. ., where thousands of lists of China-based sellers are trading land – profitable consumer goods are likely to disappear.
The treaty, which sets the fees charged by the national postal services for the delivery of mail and small parcels from other countries, gives the poor and developing markets lower shipping rates than those of the other countries. developed. The agreement – and the agreement signed in 2011 between the US and Chinese postal services – essentially gave Chinese merchants an annual subsidy of $ 170 million for sending products directly to American homes.
"Chinese sellers on EBay and other platforms are at risk of disappearing, or at least they will not find it as easy to sell to Americans," said Gary Huang, chairman of the company's supply chain committee. the American Chamber of Commerce in Shanghai. "It's been a huge advantage for them for many years and how they beat the American seller on their own turf."
$ 1 yoga pants
On Thursday, on eBay, hundreds of Chinese women sellers have announced women's workout leggings, including leggings for just $ 0.76 that can be purchased instantly. The seller, based in China, has registered more than 21,680 positive reviews from buyers in the last 12 months, according to the e-commerce site. The seller offers free shipping in the United States.
This gap is reflected in the shipping options offered by Chinese eBay sellers and other major e-commerce portals. On AliExpress, the e-commerce portal of the Internet giant, Alibaba, aimed at international buyers, shipping is free if a pair of yoga pants is transported via ePacket, the name of the subsidized service of the US postal service. Other shipping options, through private couriers such as FedEx Corp., United Parcel Service Inc. or DHL Worldwide Express, range from $ 40 to $ 60, which is essentially the total cost of the pants.
Trump's directive to eliminate postal discounts could potentially increase costs for Alibaba Group Holding Ltd., while assisting FedEx and other international transportation companies.
Any change in international postal rates will potentially disrupt cross-border e-commerce, selling goods from one retailer from one country directly to consumers of another. This activity, made possible by platforms such as Amazon, EBay and Alibaba, is expected to reach one trillion dollars by 2020.
Alibaba representatives did not respond to requests for comment. The logistics arm of Alibaba's rival, JD.com Inc., said it was looking at the potential impact. Amazon and eBay, through spokespersons, said they were reviewing Trump's memo and declined to comment immediately.
Read: Trump targets China and challenges international postal rates
Under the postal treaty, the shipping rate may represent a fraction of the cost of sending the same item from the United States to China, making returns very difficult, and may be lower than the shipping cost of shipping. an identical product in the United States.
Amazon's prices are a good illustration of this difference: the standard delivery charge for an iPhone case from China to an address in New York is $ 4.99, while a US-based seller costs $ 5.99. The difference may seem small, but adding to millions of low-cost consumer items, it has had an adverse effect for US retailers on e-commerce portals.
"US vendors simply can not compete," said Huang, founder of the 80/20 Sourcing consulting firm. "It seems like Trump wants to level the playing field and one of the results is that American consumers will have less access to this really cheap product."
US retailers are encouraging
The subsidized electronic parcel service limits packages to 2 kilograms (4.4 pounds) and less than $ 400. Chinese sellers estimate that shipping services take between 10 and 20 days between China and the United States.
US companies have welcomed Trump's withdrawal plan. "This outdated arrangement contributes significantly to the influx of counterfeit goods and dangerous drugs entering the country from China," UPS said, alongside other private courier companies, in case of abolition of the subsidized service. "
Under the treaty, it takes a year for the country to withdraw, a period during which rates can be renegotiated.
"The agreement was unbalanced," said McDavid Stoddard, director of Beyond, a shopping app that links foreign brands to Chinese consumers. "The US Postal Service has been complaining for some time and we have always doubted the long-term viability of this channel."
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