Trump Administration to Leave Postal Union in Latest Anti-China Move

By ZEKE MILLER and PAUL WISEMAN, Associated Press

WASHINGTON (AP and NAM), BEIJING (AP) — The United States announced Wednesday that it is preparing to pull out of an international postal treaty that allows China to ship packages to America at discounted rates. The move would escalate a trade dispute with China.

President Donald Trump argues that the 144-year-old Universal Post Union benefits China and other countries at the expense of U.S. businesses — making it cheaper to ship packages from Beijing to New York than from San Francisco to the U.S. East coast, which particularly benefits Chinese manufacturers. The officials say the treaty is used by shippers of the narcotic fentanyl to the U.S. from China.

The U.S. is willing to renegotiate the treaty over the next year but will leave the union if no agreement can be reached, the officials said.

Bishar Hussein, director of the Universal Postal Union, said he regrets the U.S. decision and will seek a meeting with American officials.

The move was welcomed by the U.S. National Association of Manufacturers (NAM), which called the existing postal pact “outdated” in the age of e-commerce and at a time of Chinese manufacturing dominance.

“President Trump deserves tremendous credit for the administration’s focus on eliminating the anti-US manufacturer subsidy China receives from the U.S. Postal Service,” Jay Timmons, president of the National Association of Manufacturers, said in a statement. “This outdated arrangement contributes significantly to the flood of counterfeit goods and dangerous drugs that enter the country from China. Manufacturers and manufacturing workers in the United States will greatly benefit from a modernized and far more fair arrangement with China.”

In April, Timmons sent a letter to Secretary Mnuchin outlining manufacturers’ concerns with the Universal Postal Union system, which allows China to receive a subsidy from the U.S. Postal Service for certain inbound shipments. According to NAM, the U.S. Postal Service lost an estimated $170 million on this subsidy during the last fiscal year, and that number is expected to increase 40 percent annually due to the rapid growth of e-commerce.

China on Thursday criticized Washington’s decision to leave the United Nations treaty that regulates international postage, amid a worsening trade dispute between the world’s top two economies.

The United States has imposed tariffs on about $250 billion in Chinese goods, and Beijing has responded by targeting about $110 billion in U.S. products. The economies are clashing over U.S. allegations that China is using predatory practices to challenge American technological dominance. These include hacking into U.S. companies’ computers to steal trade secrets and forcing American firms to hand over technology to China in exchange for access to the Chinese market.

Trump has made a point of cutting America’s international ties. His first week in office he pulled the United States out of a trade pact with 11 Pacific Rim countries. He also has left UNESCO and the United Nations Human Rights Council and pulled U.S. funding for the UN agency for Palestinian refugees.

Foreign Ministry spokesman Lu Kang said the move should not be linked to China, despite arguments that the arrangement especially benefits Chinese manufacturers by making it cheaper to ship packages from Beijing to New York than from one side of the U.S. to the other.

“We regret the US decision to withdraw from the Universal Postal Union,” Lu told reporters at a daily press briefing. “We will continue working with all sides to make our contributions to the development of global postal service.”

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Portions of this release from the National Association of Manufacturers.