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Trump decision on postal treaty welcomed by US retailers and manufacturers

Published October 18, 2018

WASHINGTON (BRAIN) — President Donald Trump has ordered the State Department to begin renegotiating the Universal Postal Union treaty, which allows China and other developing countries to ship products to the U.S. at very low rates. Trump said the U.S. is prepared to withdraw from the treaty if negotiations are not successful by early 2020.

Small businesses, commercial shipping companies and U.S. manufacturers have said the postal program gives Chinese vendors a significant advantage, especially on small, high-value items including electronics and clothing. 

Eliminating the cheap rates would be a start, said Pat Cunnane, the CEO of Advanced Sports Enterprises, owner of the Performance Bicycle stores and the distributor ASI.

"Happy to have it," Cunnane told BRAIN on Thursday. Cunnane has been pushing for a reduction in the U.S. Customs de minimis, which currently waives paperwork and duty collection on shipments valued under $800.

"The goal remains to reduce the de minimis from $800 to $50 (or use China's $8.00 value)," Cunnane said.

The White House on Wednesday said the U.S. will work to adopt new rates "as soon as practical, and no later than January 1, 2020." It will also file notice that the U.S. is withdrawing from the UPU. "If negotiations are successful, the Administration is prepared to rescind the notice of withdrawal and remain in the UPU," the White House said in a statement.

About 60 percent of packages shipped into the country are from Chinese companies, who often offer free shipping on consumer orders of small items. The shipping rates under the treaty are based on weight, not value. The treaty allows shipments of packages up to 4.4 pounds for as little as $5.

The National Association of Manufacturers is among the trade groups that said it supports ending the shipping discount.

"Manufacturers look forward to working with the administration to finally end the subsidy China receives from the U.S. Postal Service and to create an environment with fair and nondiscriminatory shipping around the world," said Patrick Hedren, a vice president of the trade association.

Topics associated with this article: Trade/tariffs

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