Trump calls for Chinese seller postal subsidies to cease

By Chris Dawson August 28, 2018 - 10:51 am

Terminal fees, set by the United Nations’s Universal Postal Union (UPU) are under fire from President Trump. Trump claims that goods are flooding into the US with the USPS receiving less compensation than the price charged to domestic US sellers, effectively postal subsidies for Chinese sellers.

The thinking behind terminal fees is that they’re less for underdeveloped countries in order to encourage international trade. The problem is that countries such as China have been classified as a transitional country – not entirely industrialised – and so get lower rates than for instance posting to the US from the UK. China, incidentally, is also a country well known for churning out low cost goods, often fakes or lookalikes, and often sold at a lower price due to low wages than products can be manufactured in the West.

The postal subsidies aren’t a problem unique to the US, we’ve heard from many sellers in the UK that Chinese sellers can sell certain low cost goods at a lower price then a UK seller would have to pay for domestic postage alone!

Trump it would appear has had enough. He has ordered the US Postmaster General the secretaries of State, Treasury, and Homeland Security, Postmaster General, and Chairman of the Postal Regulatory Commission to take a look at terminal fees that: Fully reimburse the USPS for costs to the same extent as domestic rates for comparable services; Avoid a preference for inbound foreign small packages containing goods that favors foreign mailers over domestic mailers; and Avoid a preference for inbound foreign small packages containing goods that favors postal operators over private-sector entities providing transportation services.

If negotiations at the UPU’s September 2018 Second Extraordinary Congress in Ethiopia fail to yield reforms then Trump has decreed that the United States will consider taking any appropriate actions to ensure that rates for the delivery of inbound foreign packages are aligned with the rates for domestic packages.

Trump may not be everyone’s favourite political world leader, but in this case his views are likely to align with those of many marketplace traders who see overseas competitors benefiting from lower cost delivery charges than they can access domestically. We suspect that many online merchants would love the Royal Mail to up their charges for Chinese sellers and level the playing field a little.

  • SAM
    7 months ago

    Well Trump might be a bit of a mad man, but he is correct with this. Totally not a level playing field and much like those who benefit form LVCR vat avoidance it needs stopped.
    We are a very low wage zero hours country now and people will always look for the lowest price and UK traders just cannot compete with China.

    • bob
      7 months ago

      ABOUT TIME!!!!

  • northumbrian
    7 months ago

    we dont think trump is mad, hes just not diplomatic, often rocking the establishment boat
    hes quite right about this

  • FD
    7 months ago

    China’s shipping costs create an unfair competitive advantage, which is to the disadvantage of UK sellers who are forced to pay far higher shipping costs for a poorer service.

  • Peter
    7 months ago

    Online market places are now flooded with Chinese sellers pretending to be UK based. How is it possible that a bulky £1.99 item with free postage bought from ebay is shipped from China? The price would barely cover domestic postage. UK sellers cannot compete with Chinese and the ONLY country that hugely benefits from in is China. Well done Trump.

  • patrick moloney
    7 months ago

    Trump don’t get enough credit for what he does
    People call him racist and this and that and the worse president ever
    The poor man has done a lot of good
    We have North Korea wanting to talk about getting rid of nuke’s
    He has starting standing up for workers in his country
    And he is actually listening to the people and acting of it
    Good on him
    Well done

  • Martin Proudeuropean
    7 months ago

    The first thing Trump has got right. Every western government the suffers should join forces with the USA on this one.

  • Alex
    7 months ago

    I agree this is a big move in the right direction for many sellers who cannot compete with the few pence postage Chinese sellers pay. We pay pounds for postage and subsidise Chinese sellers with the high rates we pay.

    The next challenge to really level the playing field is to get the Chinese to pay VAT as well.

  • 6 months ago

    For once I find myself in complete agreement with Trump, however this article is about the US postal system not the UK. I wonder how much money the Royal Mail loses delivering Chinese mail. When this situation will change in the UK.

    • Mike
      6 months ago

      With Royal Mail having struck a deal with China’s postal operator – a deal quite separate from the UN UPU arrangement – it’s likely they are very happy with the arrangement. With Chinese rates being so low – 78p / kilo from China to the UK doorstep – it’s hard to believe the separate deal delivers a direct financial benefit for RM. It is perhaps more likely the deal means RM handle China’s mail, instead of an RM competitor. The benefit to RM therefore comes from thwarting RM’s competitors, at a time when RM are perhaps feeling their competition increasingly imposing on RM’s traditional business. RM, as you would expect, are only thinking about RM; not the impact their arrangement has on its UK customers who have to foot the bill for China’s heavily subsidised business.

    • Sophie
      6 months ago

      I doubt the situation will change for a long time. The Chinese pay low postal fees and no vat. The U.K. retail industry is suffering as a result of China being able to cut out the U.K. retailer altogether and delivery directly to the customer via online marketplaces. All we read about is Brexit, our government is so caught up in Brexit other issues are being ignored. And while this happens the Chinese get richer and our high street stores close down.

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