President Donald Trump will initiate a withdrawal from a treaty that observers and businesses, including housewares industry participants, insist gives Chinese manufacturers an unfair advantage in shipping goods weighing 4.4 pounds or less to addresses in the United States.
Under terms of the Universal Postal Union treaty, developing countries pay lower costs than developed countries for final delivery of mail and small packages shipped from one country to another under a schedule of rates established every four years. China is designated as a developing country under the treaty and, so pays reduced rates to compensate the U.S. Postal Service to deliver small packages from their landing point in the U.S. to their final destinations. As such, the cost to ship packages 4.4 pounds or less from China to destinations in the U.S. is substantially less than the amount paid by postal customers to send the same small goods from one U.S. location to another.
In March, HomeWorld Business dedicated a cover story to the Universal Postal Union, the treaty and efforts to change international shipping practices that hurt businesses in the U.S.
The New York Times broke a story today, October 17, about the presidential action.
In response to the anticipated move, U.S. Senator Bill Cassidy, M.D., (R-LA) expressed appreciation for President Trump’s taking action outlined in the Ending Needless Delivery Subsidies Act. Cassidy introduced the Senate bill in April with the goal of ending practices that result in U.S. taxpayers from subsidizing international postal shipments from foreign countries such as China to the U.S.
“President Trump is standing up for American workers and companies who are being hurt by this outdated, unfair international agreement on shipping rates,” Cassidy stated. “I’ve been working with the administration for months on addressing this terrible deal because American companies are being run out of business by foreign competitors making cheap knockoff products they can ship to Louisiana for less than it costs an American company to mail the genuine product. I applaud the president for taking this action.”
Also in April, Congressman Kenny Marchant (R-TX) sponsored a bill in the U.S. House of Representatives, designated H.R. 5524, requiring the U.S. Postal Service to establish rates for delivery of inbound international mail that would not discriminate between foreign and domestic mailers, as well as to review foreign practices regarding the exchange of e-commerce goods with the U.S.
In introducing the legislation, Marchant noted, “If you have ever bought stamps or shipped a package through the mail, you’re also footing part of the bill for inbound packages from China. The U.S. Postal Service is subsidizing inbound packages from foreign countries and sticking American ratepayers with the tab. To the detriment of small businesses in my district and their customers, it is often cheaper to ship a package from China to anywhere in the U.S. than to mail a package from one North Texas city to another.”
In response to the administration action, Marchant maintained that he was encourage about the chance to reform “outdated policies that have cost American jobs. This system has placed our businesses at a major competitive disadvantage and results in postal ratepayers paying to subsidize these inbound packages from China.”
He also pointed out that the system developed under the UPU treaty facilitates transport of illicit package contents, which can include counterfeit goods and illegal drugs.
Marchant stated, “The major gateway for the import of fentanyl and other synthetic opioids from China has been to ship them through the United States Postal Service. Today’s action by the Administration achieves the same goals as my legislation, H.R. 5524, the Packages Overseas Subsidy Termination Act or POST Act, and will end a mind-numbing and costly practice by the USPS. Under this new system, Americans will no longer be gouged to pay for more expensive shipping rates to subsidize inbound international packages. The new system of self-declared rates will provide fairness to shippers and taxpayers alike. I look forward to working with the Administration as we implement this new system.”
This post has been updated to include the comments from Rep. Marchant on the administration action.