Trump Withdraws U.S. from 144-Year-Old Postal Agreement That Boosts China Retailers

President Trump moved Wednesday to withdraw from a 144-year-old international postal agreement that enables businesses in China to mail small packages to the United States at a hefty discount, an arrangement government officials said boosts foreign competitors and costs the U.S. Postal Service roughly $170 million per year.

Trump’s notice to exit from the Universal Postal Union (UPU) treaty comes as the White House cranks up the pressure on Beijing to drop what it calls predatory commercial practices, including swiping trade secrets from American companies operating in China.

“This has been a long-standing, long-festering problem,” said Robert Taub, chairman of the Postal Regulatory Commission, an independent federal agency.

The administration framed the departure as separate from the trade war in which Trump has imposed tariffs on roughly half of Chinese goods entering the United States.

Dropping out of the postal treaty, first ratified in 1874, is expected to exacerbate tensions with China, but the Postal Service and business groups applauded the action Wednesday.

“The current system has led to the United States subsidizing the imports of small packages from other countries,” said Jeff Adams, spokesman for the U.S. Postal Service.

Under the treaty, which sets fees that national carriers in 192 countries charge for mail delivery, the U.S. Postal Service bills China-based companies at a sharply discounted rate for parcels that weigh less than 4.4 pounds.

Trump administration officials say the leg up, granted under a 1969 provision, was intended to promote growth in poor countries. But it remained in place after China became an e-commerce powerhouse.

The deal has allowed the country to flood the United States with cheap goods at shipping discounts of up to 70 percent, putting American companies at a disadvantage and straining the U.S. mail system while fueling growth abroad, Taub said.

That resulted in $170 million in losses for the post office last year.

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SOURCE: The Washington Post, Danielle Paquette