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Press Release: CPA Supports White House Move to End China Shipping Discounts

October 18, 2018

Withdrawal from international postal body will help to level playing field for US producers

 

Washington. The Trump administration has announced a plan to phase-out longstanding US postal service discounts for Chinese companies. The Coalition for a Prosperous America (CPA) praised the move as a sensible step toward ending preferences for foreign manufacturers.

“This is just common sense,” said CPA chairman Dan DiMicco. “Chinese manufacturers already benefit from massive subsidies and non-tariff barriers. But the US Postal Service is charging them less to ship their products across the Pacific Ocean than it charges domestic companies. That makes absolutely no sense. It’s good that the administration is tackling the problem.”

When selling into the US market, Chinese companies have long enjoyed low-cost shipping, subsidized by the US Postal Service. The import subsidy stems from an arcane 144-year-old postal treaty whereby incoming small packages from foreign companies are charged less for delivery to US consumers than comparable goods shipped from a domestic US warehouse.

In an August memo, President Trump sought to reform the rules in the treaty. The White House asked that the Universal Postal Union (UPU) change its guidelines to ensure that 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 UPU did not do so, and therefore the US has exited the organization.

“These subsidized postal rates have been costing the U.S. $300 million a year,” said Michael Stumo CEO of the CPA. “And they’re further incentivizing the purchase, through Amazon and other services, of more subsidized goods from China. We’re happy to see the administration taking action.”

The Coalition for a Prosperous America is the nation’s premier organization working on the intersection of trade, jobs, tax and economic growth. We represent the interests of 4.1 million households through our agricultural, manufacturing and labor members.


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