This action gives the PRC and the USPS leeway whether or not the U.S. remains in the Universal Postal Union (UPU), a conglomeration of 192 countries charged with setting postal rates among member states. The proposed rates impact packages weighing 2 kilograms or less, about 4.4 pounds.
Under existing UPU guidelines, some member states, notably China, receive significantly discounted postal rates as “developing” countries even though that hasn’t been the case for some time. This is allowing Chinese merchants to substantially undercut U.S. competitors, to the point where shipping is often cheaper from China to the U.S. than it is within the U.S.
This inequity is what led the Trump administration to consider a pullout from the UPU over so-called terminal dues or UPU negotiated UPU rates, most recently set in 2016. The difference between terminal dues and the U.S. Postal Service’s costs has in effect been a subsidy for many foreign shippers.
“This was an essential procedural step in order for the U.S. to self-declare its rates and thereby provide fair postal rates for the U.S. mailers, manufacturers and workers harmed by the current system,” Peter Navarro, assistant to the president for trade and manufacturing policy, told Bloomberg Government.