Editor’s note: America should consider withdrawing from the international agreements that require our postal service to subsidize cheap shipments of products direct from China.
As the rates of the U.S. Postal Service continue on their precipitous ascent, how cheaply Chinese merchants are able to ship their products thousands of miles across the world to the United States has become emblematic of the stark trade imbalance between the countries as well as the disadvantages that American companies are up against as foreign competitors outmaneuver them in their own backyard.
[Wade Shepard | July 18, 2018 | Forbes]
As you browse through the listings on sites like Amazon and eBay it is almost impossible not to be amazed at how cheaply China-based merchants are selling products for: xlr cables for $.99, a necklace for $.78, 10 watch batteries for $.78 -- all with postage included. Perhaps you may feel a little suspicious or even a touch indignant about these low prices, as you know that you can't possibly send packages for anywhere near this price internationally or, for that matter, even across the street. How cheaply the Chinese are able to ship products to the U.S. has become a mystery of sorts in online portals and message boards:
I've purchased several items on Ebay that came from China or Hong Kong. I bought a 4 pack of rechargeable batteries for 99 cents with free shipping. A 3 pack of ear bud extension cords with volume control for 89 cents with free shipping...The packages arrive withing [sp] 2 weeks with Chinese postage stamped all over them. How on earth can they sell these items so cheaply and then ship them all the way from Asia for under a buck?
However, it’s actually no secret as to how the Chinese are able to ship products abroad so cheaply. The reason is actually rather simple: They receive subsidized postage rates.
But before you scoff and think this is just another example of Beijing disrupting fair trade and tilting the tables in support of their domestic producers, please realize that you’ve pegged the wrong government to be the recipient of your complaints. These super low shipping rates are being subsidized by the U.S. Postal Service. Yes, the United States and, in a roundabout way, the U.S. taxpayer is footing the bill so that Chinese merchants can ship their products to the USA for dirt cheap, essentially losing millions to support a dynamic where domestic American businesses are being undercut by foreign merchants who are immune to any and all intellectual property and consumer safety laws.
In 2011, the U.S. Postal Service made special agreements with the national postal carriers of China and Hong Kong (and subsequently South Korea and Singapore) to allow tracking-enabled packages not exceeding 36” or weighing over 4.4 pounds to be sent to the U.S. for extremely low rates. They called this shipping option the ePacket, and the rates are so low that it's cheaper to ship small parcels from China to an American city than it is to send that same parcel domestically. As Amazon’s Vice President of Global Policy Paul Misener pointed out: