TRUMP OPENS NEW FRONT AGAINST CHINA
Withdraws from a 144-year-old postal treaty that allows Chinese companies to ship small packages to the US at steep discounts
President Trump plans to withdraw from a 144-year-old postal treaty that has allowed Chinese companies to ship small packages to the United States at a steeply discounted rate, undercutting American competitors and flooding the market with cheap consumer goods.
The withdrawal, announced by the White House on Wednesday, is part of a concerted push by Trump to counter China’s dominance and punish it for what the administration says is a pattern of unfair trade practices.
The White House, in a statement, said “sufficient progress has not been made on reforming terms” of the postal treaty and that it would begin the withdrawal process while seeking to “negotiate bilateral and multilateral agreements that resolve the problems.”
The Universal Postal Union treaty, first drafted in 1874, sets fees that national postal services charge to deliver mail and small parcels to countries around the world. Since 1969, poor and developing countries — including China — have been assessed lower rates than wealthier countries in Europe and North America.
While the lower rates were intended to foster development in Asia and Africa, Chinese companies now make up about 60 per cent of packages shipped into the country, taking advantage of the lower rates to ship clothing, household gadgets and consumer electronics. Many websites now offer free shipping from China, in part because of the cheap postal rates, administration officials say.
The decision to withdraw was made at the urging of Peter Navarro, Trump’s hard-line trade adviser, who sees the move as a way to thwart China and an opportunity to challenge the authority of international groups, like the World Trade Organization, that, in his view, fail to give the United States voting powers commensurate with the country’s economic stature. Trump, who told “60 Minutes” last weekend that his biggest regret as president wasn’t quickly “terminating” the North American Free Trade Agreement after he took office, has also been eager to emphasise that he is tough on trade by pulling out of a treaty, even a relatively obscure one. State Department officials were expected on Wednesday to inform officials at the Universal Postal Union in Bern, Switzerland, a branch of the UN that administers the treaty, of their intention to pull out of the system and “self-declare” new, higher rates on China, a US official said.