Subsidized Shipping to China
Supporting Made in USA

Trump Puts the Brakes on China’s Subsidized Shipping into the U.S.

Yesterday Trump announced that the US would remove itself from Universal Postal Union treaty (UPU), established by the Treaty of Bern of 1874 and is a specialized agency of the United Nations (UN) to regulate postal rates so that underdeveloped countries could ship small parcels at rates they could afford.

In 2014 The Washington Times reported that the U.S. Post office is losing millions of dollars a year subsidizing these reduced shipping rates to China and other countries.

According to a more recent New York Times Article:

“While the lower rates were intended to foster development in Asia and Africa, Chinese companies now make up about 60 percent of packages shipped into the country, taking advantage of the lower rates to ship clothing, household gadgets and consumer electronics. Many websites now offer free shipping from China, in part because of the cheap postal rates, administration officials say.”

In February of this year, we wrote about the Universal Postal Union Treaty and even held a tweet chat discussing it. Many if not most consumers are not aware of this treaty. Not only is this costing US consumers who are basically paying higher prices to offset the cheap prices for countries like China, but the shipping rates have been so unfairly priced that companies in China are shipping consumer goods at rates far below what US companies can ship for within the US and far lower than what US companies can ship anywhere else in the world.

Chinese companies are shipping small packages directly through e-commerce sites like Amazon, Alibaba and more. Some have even been shipping counterfeit goods; because China has been extremely lax on intellectual property rights of American owned companies.

Some small business owners have been put out of business as a result, while others struggle because they are unable to compete with unfair rates afforded to businesses shipping from overseas.

China has become an extremely wealthy nation and they can certainly pay the same rates Americans pay. Most Americans would be up in arms if they knew they have been subsidizing China to ship their counterfeit and low quality goods to the US while we pay more. As a matter of fact, the US post office continues to bleed cash and recently announced another increase in our postage rates. Perhaps it is time for China to pay the same rate that the rest of us do, perhaps a bit more to make up for years of abuse.

We also reported back in February about the sweetheart deal that the U.S. post office gives to shipping giants like Amazon and charges them shipping rates less than what it actually costs to ship packages. Most small business owners don’t have the option of Negotiated Service Agreement’s like this through the post office.

Now just after Trump Announced that the U.S. is leaving the Universal Postal Union Treaty, the post office announced that it wants to raise the shipping rates for Amazon and other companies about 9-12%. This increase will help other retailers compete a bit more as consumers look for discounted or free shipping, something most small business owners cannot afford to do.

The United States Post office lost $2.7 billion in 2017 and $2.8 in 2016. Perhaps raising the postage rates for countries like China and upgrading the Negotiated Service Agreements will help the post office stop bleeding money and costing small business owners their livelihoods.