The US on Wednesday announced its intent to withdraw from the little-known UN Universal Postal Union (UPU), arguing that the current system that governs worldwide postal rates allows countries like China to provide subsidies to their postal companies to ship products to the US at cheaper rates thus putting American firms at a disadvantage.
The treaty sets rates that national postal services charge to deliver mail and small packages from other countries.
According to UPU, the official notification on Wednesday, from US Secretary of State Mike Pompeo, said that the withdrawal "shall be effective one year after the day on which [the UPU receives] this notice".
The group said the discounts amount to a subsidy for Chinese shippers that cost the US Postal Service US$170 million a year ago.
The administration of the unhappy trump global postal rates. The move is the latest development in the country's ongoing trade war with China, one of the treaty's top beneficiaries.
White House officials said the United States would start the process of getting out of the Universal Postal Union, a Switzerland-based United Nations organization that connects postal services worldwide. Interests like the National Association of Manufacturers have applauded the administration for taking the first step towards ditching the "outdated" agreement that the group says is partially responsible for a "flood of counterfeit goods" from China.
Compare that to other fronts in Trump's trade war.
It's not clear whether US consumers will face higher prices reflecting new shipping rates if the Untied States formally withdraws from the UPU. There's a good argument to be made that China is no longer in need of the "developing nation" designation now that it boasts the world's second-largest economy. He attacked what "we consider to be nearly predatory, in some cases certainly predatory, economic behaviour" that was encouraging small countries to build up "massive debt" that they would have "difficulty repaying". Withdrawal from the postal treaty does not take effect for at least one year, setting the stage for talks which could renegotiate its terms.
A USA pullout from the 144-year-old organization, a specialized United Nations agency, would strip the US from access to special codes needed to send and receive mail internationally, Clivaz said. "The anti-competitive nature of the [Universal Postal Union] has concerned the USA government since the Reagan administration", Postal Regulatory Commission Chairman Robert Taub said.
The reason for this was unfair, according to the administration of President Donald trump, the benefits of Internet Commerce, which receives mainly China but also other countries such as France and Germany. "China is an energy hungry superpower and the United States is once again a major player on the energy export markets".
China has stopped buying United States crude and liquefied natural gas (LNG) in response to Donald Trump's decision to impose a third round of tariffs on $200 billion worth of Chinese imports.
The withdrawal talks are another step in the USA and China's trade war.