The Trump administration is seeking to end international shipping benefits some foreign countries receive that U.S. businesses say gives China and others an unfair advantage.
In a memo issued on Thursday, President Trump said his administration would seek to reform the guidelines that govern the Universal Postal Union, an agency within the United Nations that is tasked with organizing postal service policies across member countries.
Under the current UPU’s treaty, China and other countries deemed a “developing nation” receive a lower rate for packages shipped to the U.S. via the United States Postal Service. American businesses argue the policy allows those nations to transport items for much cheaper, putting their companies at a disadvantage.
Trump, in the memo, said the agency has not done enough to ensure a level playing field between the member nations and vowed that the U.S. will take action if the UPU does not address the administration’s complaints.
“As a member country of the UPU, the United States recognizes the importance of this long-standing organization and is proud of the United States’ unbroken record of participation in it,” he wrote. “It is the policy of the United States to promote and encourage the development of an efficient and competitive global system that provides for fair and nondiscriminatory postal rates.”
The White House is demanding that the UPU change it guidelines to ensure that the international rates “fully reimburse the USPS for costs to the same extent as domestic rates for comparable services” and that foreign mailers are not favored over domestic shippers.
The announcement was welcome news to Sen. Bill Cassidy, R-La., who has been pushing legislation on the issue.
“I’ve been working with the administration for months on addressing this terrible deal, because American companies are being run out of business by foreign competitors making cheap knockoff products they can ship to Louisiana for less than it costs an American company to mail the genuine product,” he said in a statement. “President Trump is standing up for American workers and companies who are being hurt by this outdated, unfair international agreement on shipping rates.”
The National Association of Manufacturers, which earlier this year urged Treasury Secretary Steven Mnuchin to put a halt to the shipping subsidies China receives, also praised the administration’s actions.
“Manufacturers have struggled in recent years with the rapid growth of counterfeit goods pouring in to the country through the U.S. postal system from countries like China. This problem is fueled by heavily subsidized shipping rates and it displaces American innovators from online marketplaces,” Patrick Hedren, vice president for labor, legal and regulatory policy, said in an emailed statement. “Manufacturers are pleased to see that this issue has been elevated to the very highest levels in the Trump Administration.”
A 2017 report from the Government Accountability Office found that the USPS does not recover the lost profits from transporting the international packages that qualify for the lower rate. Net losses for those types of shipments, GAO said, doubled from 2012 to 2016.
Trump has targeted the USPS as part of his broader battle against Amazon owner Jeff Bezos, who also owns the Washington Post, an outlet that finds itself routinely at odds with the White House for reporting unflattering stories on the administration.
Trump previously claimed the USPS is subsidizing packages for Amazon and issued an executive order to launch a strategic review of the independent agency.
