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October 17, 2018 12:30 PM, EDT

Trump Plans Exit From Postal Treaty as Measure Against China

USPS truck Andrew Harrer/bloomberg News

President Donald Trump plans to withdraw the United States from a 192-nation treaty that gives Chinese companies discounted shipping rates for small packages sent to American consumers, another escalation of his economic confrontation of Beijing.

U.S. officials said the administration sought to revise the treaty in September and was rebuffed by other nations, prompting the decision to withdraw. The State Department will deliver a notice to the Universal Postal Union in Switzerland on Oct. 17, the officials, who asked not to be identified, told reporters on a conference call.

President Trump deserves tremendous credit for the administration’s focus on eliminating the anti-U.S. manufacturer subsidy China receives from the U.S. Postal Service.

Jay Timmons, National Assoc. of Manufacturers

National Association of Manufacturers logo

Under the union’s framework it takes a year for a country to withdraw, during which the rates can be renegotiated. The officials said postal rates wouldn’t change for at least six months, and that the United States would prefer to stay inside the union’s system.

“President Trump deserves tremendous credit for the administration’s focus on eliminating the anti-U.S. 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 “This outdated arrangement contributes significantly to the flood of counterfeit goods and dangerous drugs that enter the country from China.”

The group said the discounts amount to a subsidy for Chinese shippers that cost USPS $170 million in 2017. The treaty sets fees that national postal services charge to deliver mail and small packages from other countries. Poor and developing countries are assessed lower rates than wealthier countries, an arrangement that has benefited China.