Trump May Axe China Postal Rates, Would Small Sellers Win?

Trump moves to exit 144-year-old postal pact over cheap China mail

Trump moves to exit 144-year-old postal pact over cheap China mail

The United Nations treaty sets lower worldwide rates for packages from certain countries, a move originally created to support poorer nations.

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 USA mail system while fueling growth overseas, Taub said.

USA officials say they will be willing to renegotiate the postal treaty over the next year but will leave if no agreement can be reached.

But more worrying, analysts who spoke to International Business Times warned that an escalation in the trade war could potentially disrupt global trade flows and cast a shadow over longer-term economic prospects in 2019.

In his latest attempt to battle the U.S.

The treaty "contributes significantly to the flood of counterfeit goods and risky drugs that enter the country from China", the National Association of Manufacturers said according to CNBC. The yuan fell to 6.9411 per dollar at mid-morning and has declined by nearly 10 percent against the dollar since April as China's economic growth cooled and US and Chinese interest rates went in opposite directions.

The decision to withdraw was made at the urging of Peter Navarro, Trump's trade adviser, who sees the move as a way to thwart China and an opportunity to challenge the authority of worldwide 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. Wish earned its $8.5 billion valuation through its ability to ship Chinese goods to the USA on the cheap.

"He (Trump) wants that US stays ahead, economically and is not taken over by China". It also comes amid an escalating trade dispute between Beijing and Washington that has resulted in USA imposition of tariffs on about $250 billion worth of Chinese goods and the Chinese retaliating with similar punitive taxes on about $110 billion in American products.

Officials said the discounts strain the finances of the US Postal Service, facilitate the shipment of counterfeit goods and distort pricing within the US, leading to higher fees for domestic companies.

Officials stressed that the goal is not to leave the UPU, even as they announced Trump's intention to withdraw from the treaty.

Under the treaty's framework it takes a year for a country to withdraw, during which rates can be renegotiated. According to the Financial Times, the cost to mail a 4.4-pound package within the United States is $19 to $23, while China Post pays just $5 to ship a similar package to the United States.

In a radio interview on October 12, Trump's National Security Adviser John Bolton signalled further aggressive measures against China across the board.

DBS said in its note that China growth will head towards 6 percent if exports slow in Q4 2018 or early next year, although the chances of a credit-driven policy stimulus is expected to rise considerably in that case.

"American companies should not pay more for package delivery within the United States than what the U.S. Postal Service collects to deliver packages from overseas", he said in a statement.

He believes that Trump "will keep raising the stakes until Chinese President Xi Jinping makes a phone call to Trump and asks him how to resolve it so they can both sign a win-win trade deal".

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