President Donald Trump volleyed billions of dollars in tariffs with China over the summer, raising concerns of higher domestic manufacturing costs. | AP Photo/Evan Vucci White House Trump withdraws from postal treaty in new front against China

The Trump administration announced Wednesday it will withdraw from a 144-year-old postal treaty, claiming the treaty gives countries like China and Singapore an unfair advantage and floods U.S. markets with cheaper e-commerce packages.

The withdrawal echoes President Donald Trump’s history of accusatory rhetoric against China for manipulating trade by subsidizing its manufacturers. Trump volleyed billions of dollars in tariffs with China over the summer, raising concerns of higher domestic manufacturing costs. A senior administration official said Wednesday that the withdrawal from the postal agreement is not related to the tariffs, but the move is aimed at protecting U.S. manufacturers and the U.S. postal system.


The Universal Postal Union, a body of the United Nations since 1948, allows developing countries to pay cheaper rates when shipping packages internationally, often putting some of the cost of delivering packages on the postal services of wealthier countries. The policy was initially intended to spur economic growth in poorer countries by connecting them with global markets.

But now that some of those countries have become exporting giants, the administration hopes to use its withdrawal as leverage to negotiate more favorable terms for historically wealthy countries like the United States. A senior administration official said the administration would prefer to stay within the union and that a full withdrawal takes a year to implement and that he hopes the U.S. can negotiate more favorable terms within that time frame.



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“Terminal dues,” or the rates charged by countries receiving packages to finish deliveries within their borders, is not a new issue for the U.S. Postal Service. A 2015 USPS report argued having internationally determined terminal dues that do not match the actual cost of shipping packages causes the USPS to front much of the cost. The report advocated that the United States set its own rates for shipping incoming packages once on U.S. soil.

A senior White House official said Wednesday that the administration is working in “Trump time” to expediently implement rates that fully cover the cost of shipping for international packages once in the United States. He said the U.S. could be setting its own rates as soon as six months from now.

The official said several other developed countries, including Australia, New Zealand and some northern European countries are sympathetic to the U.S. complaints, though he didn’t know whether any were planning to withdraw from the treaty, too.

Sen. Bill Cassidy (R-La.) introduced legislation in April that would have ended the internationally determined differences in terminal dues and praised the Trump administration’s Wednesday action. His bill, bluntly called the Ending Needless Delivery Subsidies Act, never made it past the Senate Committee on Foreign Relations, but he said he has been working with the administration for months on the issue.

“President Trump is standing up for American workers and companies who are being hurt by this outdated, unfair international agreement on shipping rates,” Cassidy said in a statement.

The National Association of Manufacturers and U.S. Chamber of Commerce also praised the move, saying the status quo on terminal dues leads to the United States essentially paying for Chinese shipping.

“This outdated arrangement contributes significantly to the flood of counterfeit goods and dangerous drugs that enter the country from China,” NAM president Jay Timmons said in a statement. “Manufacturers and manufacturing workers in the United States will greatly benefit from a modernized and far more fair arrangement with China.”

An administration official said the business community, including the Chamber of Commerce, had previously advocated a change in postal terminal dues, sending letters to the administration to end the “economic distortion” created by current postal rules.

Sean Heather, vice president of the U.S. Chamber’s Center for Global Regulatory Cooperation, also applauded the Trump administration using the withdrawal as a bargaining chip to further negotiation.

“Negotiating a fair deal on a bilateral basis that reflects the costs to deliver packages is exactly what is needed,” Heather said. “The Chamber looks forward to supporting these bilateral negotiations.”