Trump's plans to withdraw from UPU could cause "postal chaos"

United States Postal Service and other mail outside a home

United States Postal Service and other mail outside a home in California. REUTERS Lucy Nicholson File

China says it regrets Washington's decision to leave the United Nations treaty that regulates worldwide postage amid a worsening trade dispute between the world's top two economies.

The Universal Postal Union or UPU, administered by the United Nations from an office in Bern, Switzerland, was created in 1874.

This appears to be a calculated move to put actual pressure on Chinese interests exploiting what the White House sees as an unfair global agreement.

FedEx Corp declined to comment. The biggest winners could be shipping carriers such as UPS.

The State Department was expected to notify Universal Postal Union officials of the move today and "self-declare" new, higher shipping rates on China, according to the New York Times. A Trump administration official told The Wall Street Journal that the administration attempted to renegotiate terms at a UPU meeting in September where the UPU agreed to change rates in 2020, but the administration official categorized this as being "rebuffed".

"If negotiations are successful the administration is prepared to rescind the notice of withdrawal and remain in the UPU", according to a statement from White House press secretary Sarah Sanders. Other shipping options from companies like FedEx Corp., United Parcel Service Inc. or DHL Worldwide Express range from $40 to $60, raising the cost of the cheap trousers so much that a buyer might as well get them from a store or seller in the U.S.

National Association of Manufacturers President and CEO Jay Timmons said 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".

Senior White House officials said Wednesday that the U.S. State Department will set its own "self-declared" rates for packages from overseas. The Department of State will also file notice that the United States will withdraw from the UPU.

"Trump is taking the right approach, by waiting for China to enter a truce on trade war talks", the CCTV editor suggested.

The US has helped rebuilt China, he said. Delay could come from arbitration, which is possible under the UPU framework, he said. It also asked for rates that avoid a preference for inbound foreign small packages containing goods that favors foreign mailers over domestic mailers, and that avoid a preference for inbound foreign small packages containing goods that favors postal operators over private-sector entities providing transportation services.

However, there are a lot of moving parts to worldwide mail delivery, and the United States could find itself playing a game of "Jenga" in which it tries to, in effect, pull out a single block without crashing the entire stack.

Terminal dues refer to the rates and fees paid by one country's postal operator to another for delivery of letter-post items generally weighing up to 4.4 pounds.

UPU Director General Bishar Hussein said in a statement Wednesday that he "regrets the decision" and welcomed the opportunity to talk further with US officials.

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