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WASHINGTON – President Trump is considering withdrawing from a 144-year-old postal treaty that allowed Chinese companies to ship small parcels to the United States at a greatly reduced rate, thereby reducing the price of US competitors and flooding the market with cheap consumer products.
This withdrawal is part of a concerted effort by Mr. Trump to counter China's dominance and punish it for what the government describes as a pattern of unfair trade practices. The move is expected to be announced Wednesday, officials said.
The Universal Postal Union Treaty, drafted for the first time in 1874, sets the fees charged by national postal services for the delivery of mail and small parcels to countries all over the world. Since 1969, poor and developing countries – including China – have been valued at rates lower than those of rich countries in Europe and North America.
While lower tariffs were aimed at promoting development in Asia and Africa, Chinese companies now account for around 60% of parcels shipped in the country, taking advantage of lower rates to ship clothes, household gadgets and electronics. General public. Many websites now offer free shipping from China, in part because of cheap postal rates, officials said.
The decision to withdraw was made at the request of Peter Navarro, Trump's commercial adviser, who sees this as a way to thwart China and an opportunity to challenge the authority of international groups, such as World Trade Organization, which: according to him, does not give the United States a voting power commensurate with the economic stature of the country.
Mr. Trump, who said at "60 minutes" last weekend that his greatest regret as President did not "promptly terminate the North American Free Trade Agreement after taking office", also pointed out that he was harsh in his by withdrawing from a treaty, even relatively obscure, according to the same source. people familiar with his thinking on the matter.
State Department officials were to inform Wednesday the officials of the Universal Postal Union in Berne, Switzerland, the United Nations branch that administers the treaty, their intention to withdraw from the system and "declare them themselves "new, higher rates. about China, said a US official.
According to union rules, members will have one year to renegotiate new conditions before the withdrawal becomes permanent.
This decision is likely to exacerbate tensions with China, which the government has accused of unfair trade practices and punishable by tariffs on Chinese goods worth $ 250 billion, restrictions on investment and other measures. Government officials are still questioning whether Mr. Trump will meet with Chinese President Xi Jinping in Argentina next month.
It is not clear whether China will retaliate if the US withdraws from the treaty. The administration officials said they were evaluating rates for other countries and had not made any decision as to whether the policy would extend beyond the China.
Mr. Trump does not need Congressional approval to withdraw as the latest version of the treaty has never been put to the vote, officials said.
This pact has long been a source of frustration for presidents of both parties and has prompted complaints from small businesses, large retailers like Amazon and shipping giants like UPS. The treaty was amended in 2016 to increase the shipping costs of Chinese exports. But Mr Navarro and Mr Trump felt that these changes were insufficient to cope with the explosion of free online shipping offers of goods from China.
"These disparities have led to massive distortions in the e-commerce market," Navarro wrote. in an editorial of the Financial Times last month. "It is often possible for a Chinese company to sell" replacement "products through online suppliers, such as Amazon or Alibaba, to US consumers at a lower price than it costs to American shippers to ship authentic products. In addition, although USPS loses approximately $ 1 on each small package from China, outgoing mail from US exporters is billed well above cost. "
A 2015 report by the Inspector General of US Postal Services revealed that the treaty, created to facilitate the movement of mail and small parcels between 192 countries, had not been revised to reflect the new realities of electronic commerce and the aggressive reduction of China by China. international competitors.
According to US estimates, the price of shipping a 4.4-pound package, the largest package covered by the treaty, between China and the United States is &,,,,,,,,,,, about $ 5, according to estimates of post offices shot by Mr. Navarro's staff.. US companies can pay two to four times this amount to ship a similar package from Los Angeles to New York, and much more for parcels shipped to China.
The system "creates winners and losers," concluded the report's author, especially the Chinese national postal service and "Chinese online retailers of the low value light package segment at the expense of the US postal service and retailers American ".
It is unclear how much this disparity costs US taxpayers and retailers, in part because postal services do not publish a detailed breakdown of shipments by country. A 2014 study, quoted in an analysis of the issue by the postal service, estimated that the reduced shipping costs of the industrialized countries could reach up to 2.1 billion dollars a year.
Losses for retailers and manufacturers could be much greater as e-commerce grows.
Industry groups, even those who questioned the president's tariffs on imports from China, hailed this initiative as proportional and targeted.
"This outdated arrangement significantly contributes to the influx of counterfeit goods and dangerous drugs entering the country from China," said Jay Timmons, executive director of the National Association of Manufacturers, a professional group. "Manufacturers and workers in the US manufacturing industry will greatly benefit from a modernized deal and much more just with China."
But the changes could have an even greater impact on small retailers who have been outperformed and outsourced by their Chinese competitors.
Jayme Smaldone, who runs a housewares business in Rahway, NJ, has 12 employees. He first became aware of the problem by noticing websites selling Chinese imitations of his "Mighty Mug," an office coffee cup that he had designed with an anti-rollover base.
"We have to do something," he said. "How can my government subsidize China and drive me to bankruptcy?"
