Post Office

No More $1 Yoga Pants as Trump Aims Trade War at Global Postal Treaty

Trump's latest trade war maneuver will raise prices, but it's more defensible than his tariffs.



The Trump administration's decision to begin withdrawing from a decades-old international postal treaty may look like more economic nationalism.

In some ways, it is. Pulling out of the Universal Postal Union (UPU) means American consumers may no longer have access to deeply discounted Chinese goods—like $1 yoga pants,or thousands of other cheap, Chinese-made goods available through online retailers—shipped into the country at postage rates less than what domestic packages are charged.

This appears to be a calculated move to put actual pressure on Chinese interests exploiting what the White House sees as an unfair international agreement. It is also an attempt to save American taxpayers' money. And it is a practical application of the administration's oft-signaled willingness to favor American industry even at the expense of American consumers.

How you feel about that trade-off probably depends on which camp you identify with the most. But unlike the president's obsession with tariffs—which increase costs for both consumers and American industries that depend on foreign trade, foreign supplies of raw materials, or even domestic supply of materials subject to price increases as foreign supplies are hit with tariffs—withdrawing from the UPU at least contains a discernible logic.

"This is likely a means to gain leverage vis-a-vis the UPU, and the the administration and world have the next 14 months to work out a better deal," says Nick Zaiac, a commercial freedom fellow with the R Street Institute.

But, he adds, "pulling out will have lots of nasty side implications. We'd no longer be bound by world mail standards, potentially increasing costs in the long term. There could be a temporary loss of access to the international mail system if alternatives are not arranged in time."

Originally inked in Switzerland way back in 1874, the UPU attempts to harmonize the postal rules of the 192 member countries. Because every nation has a different postal system, and because every postal system has a different set of rates that it charges for parcels of various sizes and weights shipped over different distances, the UPU provides an alternative to the complicated process of determining the exact fee for every package shipped across international borders. At the end of each year, postal services settle up with one another based on the annual volume and weight of transactions between nations, based on a fee that's written into the treaty.

Those treaty-based fees are the root of the Trump administration's complaint about the UPU. Under the terms of the deal, developing nations—a designation that includes China, despite the fact that it ships more parcels overseas than any other state—are charged a lower rate than richer countries like the U.S. As a result, parcels originating in China can be sent to the United States for significantly lower postage than if those same parcels had originated inside America.

That means U.S. consumers have access to cheaper goods from China, but American manufacturers and retailers (including Amazon, for reasons that should be fairly obvious) dislike the fact that they are effectively undercut on shipping costs by Chinese goods mailed into the country. 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.

"It's another one of those things that Trump can point to as evidence that international rules put U.S. companies at a disadvantage and be, well, correct," says Dan Ikenson, a trade policy expert with the Cato Institute. Ikenson says the decision will create benefits for some U.S. groups and costs for others, but seems like part of the administration's "ongoing inquisition against international agreements and institutions."

Those lower rates for developing countries were added to the treaty in 1969; they were intended to foster development in Asia and Africa by making it easier for businesses in those places to ship goods internationally. U.S. officials point to the multitude of websites offering free shipping from China as an example of how China is taking advantage of international agreements to gain an unfair edge over their American competitors.

Of course, China has come a long way since 1969. 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. That's exactly the case the Trump administration is making. "They're using our Postal Service and contributing nothing to the overhead, and Americans have to pay for that," Robert Taub, chairman of the Postal Regulatory Commission, tells The Washington Post.

In 2016, the USPS handled over 1 billion pieces of international mail—both inbound (received from other countries) and outbound—but rates for inbound international mail did not fully cover the costs for delivering that mail in the U.S., according to testimony provided by the U.S. Postal Service to the Government Accountability Office (GAO) last year. In 2015, the USPS inspector general found that a 4.4 pound parcel (the heaviest allowed under the UPU treaty) could be shipped from China to the U.S. for just $5, even though it would cost at least twice as much to send the same package from New York to California.

Consumers might appear to "win" by having access to cheaper goods because of the UPU treaty, but only because American taxpayers are subsidizing the whole enterprise by propping up the U.S. Postal Service, which has lost $18.9 billion in the past four years.

The United States leaving the treaty means that "taxpayers and U.S. companies (relative to foreign companies) probably benefit; consumers and import-using manufacturers probably get hurt," says Ikenson, adding that he's not sure whether the U.S. will actually leave the treaty or use the "threat of bailing to negotiate better terms for US exporters."

Compare that to other fronts in Trump's trade war. The White House keep saying that tariffs applied to Chinese imports are a negotiating tactic, but the strategy looks more like an attempt to steal underwear for profit. In other words, there's no clearly articulated plan to move from step one (force American businesses and consumers to pay higher taxes for Chinese-made goods) to step three (get China to agree to various trade concessions), because there's no logical link between the administration's actions and the desired outcome.

There's no way to know whether the Trump administration's plan to withdraw from the UPU will work out in the long run, or whether it will be another barrier to trade that whacks consumers without any commensurate benefits for the American economy. But compared to the carpet bombing tactics used to fight the trade war so far, this looks like a precision strike.

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  1. Come on, man, you can't mention Yoga pants and not include a picture to illustrate the concept. What is this place coming to?

      1. I ain't clicking that link to see Donald Trump in yoga pants just because Zeb's a disgusting pervert.

      2. For the wary: Typical yoga pant colors ... but the pattern is Donald Trump's smiling face.

      3. See through? So that's a giant tattoo?

      4. Just a little higher and he would have a hidden Hitler mustache.

        Someone should alert CNN immediately!

  2. Originally inked in Switzerland way back in 1874, the UPU attempts to harmonize the postal rules of the 192 member countries.

    Everybody knows that President Grant was a sad loser that signed very bad treaties for the US.

  3. Wait what? This is cutting into Yoga pants? Ok, now we need to straighten this tariff thing out.

  4. Under the terms of the deal, developing nations?a designation that includes China, despite the fact that it ships more parcels overseas than any other state?are charged a lower rate than richer countries like the U.S. As a result, parcels originating in China can be sent to the United States for significantly lower postage than if those same parcels had originated inside America.
    Those lower rates for developing countries were added to the treaty in 1969

    Three years before Nixon went to China. I suppose there's an honest summation of the real rationale somewhere.

    At least this move sounds sensible. Anything which increases the honesty of prices is good.

    1. Whenever I order something to be mailed from China it always seems to end up in France.

      1. My problem with ordering from China has been, it takes 2 days to get from China to Customs, sits in Customs for a month and a half, then takes two days to get from Customs to me.

        That's been enough to get me to prefer NA shippers even with a price difference.

    2. As was mentioned, it affected a lot of countries, not just China, which wasn't exporting anything at that point anyway

    3. 'Cept that it was USPS Managing Director and Senior Vice President Paul Vogel that struck this deal with Hongkong Post, China Post (and subsequently South Korea and Singapore).....

      Read more at the USPS website....

  5. I went to Wal Mart last weekend and they didn't have what I was looking for because they took it out to make room for Christmas shit. Good god, it's not even Halloween yet. Anyway, I passed by the ladies section and they had those string tank tops for $1.68 each. Wow. That's fucking cheap. They must have gotten them for free or something. I just don't see how they're cheaper than a bag of Halloween candy.

    1. The elves that make candy have a better union then the Chinese workers in the Communist party?

      1. The Elvish Toy, Shoe, and Baker's Union is a 'opt-in' union in a 'right-to-work' nation - if they can't bring home the bacon then no one will pay their dues. And they're in competition with the Elvish Baker, Toy, and Shoemaker's Union.

  6. This is the sort of shit Republicans do instead of supporting free markets. Abolish the US postal system.

    1. Why do you hate the United States Constitution?

      1. Constitution says may, not must, in regards to the us postal system.

    2. This is literally removing the government price controls for free market shipping prices.

      The problem is thatm many socialist governments set all shipping pricing. The USPS is set like that but UPS and FedEx are not.

    3. Abolish the US postal system.

      Or simply set it free. Let it operate as a private company with no monopoly.

  7. "No more $1 Yoga Pants..."

    Now that gets my attention. If it takes a yoga pants specific subsidy then I will selfishly support it. My loyalty to the cause has limits. Yoga pants make going out to shop worthwhile. I also support a huge tariff on long t-shirts.

    1. I'd like to see halter tops make a comeback.

    2. Only in smaller sizes. No fat chicks!

    3. Sometimes those long t-shirts you unfairly demonize are an act of mercy.

  8. The price difference between sending packages from China to the US versus the other direction makes 'money back' guaranties worthless because the shipping costs eat up too much of the refund. It encourages the sale of shoddy goods.

    Without the subsidies, the business model will have to change from shipping retail quantities to wholesale, with retail handled by US distributors. This will help protect consumers.

  9. We Await Silent Tristero's Empire!

  10. It makes sense that China shouldn't be charge postal rates that are more appropriate for countries like Zimbabwe. But why withdraw from the UPU treaty completely? Why not simply renegotiate it?

    1. Who knows what he's thinking - maybe this is a nudge to get them to renegotiate? It could be some Art of the Deal thing for all I know.

      1. Yeah I don't buy the 99 Dimensional Chess bullshit.

        I just think he instinctively dislikes international agreements. That we would all be better off if the US were in charge and everyone else was merely following.

        1. If this is just about disliking international agreements, why are they attempting to renegotiate it?

        2. To chemjeff, everything Trump does is random.

          Trump has been railing against amazon for years, this is one way to get at bezos for his crony capitalism.

        3. He love international agreements. Hence his insistence that free-trade can't happen unless government intervenes.

          But its not 99D chess to think that in this case he is actually doing this to apply pressure to bring them back to the negotiating table. Its a lot more direct than the 'we'll beat our children until you stop beating your children' tack he's taking with tariffs.

          1. Government is already intervening.

            Managed trade is the status quo.

            Freedom isnt free.

            1. So let's start beating our children then.

              1. You could do that. I will just pay a bit more so we can renegotiate these managed trade deals.

              2. Spare the rod, spoil the international adversary.

        4. If I recall correctly, a previous president warned us against signing entangling treaties.

          1. Also a non-president, Benjamin Franklin.

    2. The withdrawal from the current treaty is postdated 14 months in the future, to provide an opportunity, and impetus, to renegotiate it. If you were China, why would you renegotiate a treaty that was so advantageous to you if there was no risk in not doing so?

    3. We just tried renegotiating the rates through the usual channels, at the Extraordinary Congress of the UPU this September (the only one in history, setting aside the celebratory one held for the UPU's 25th anniversary). Trump had already informed the parties back in August that the US would take action unilaterally if the UPU didn't agree to changes at the Congress.

      The decision by the member states at UPU Congress was not to change the rates, to put off all further discussion of rate changes until 2020, and declare that they had "achieved a major success by approving a compromise proposal" by deciding to not change the rates and push things off until 2020.

      In accordance with the warning the US gave in August, in response to the UPU refusing to do anything, Trump's taking unilateral action.

      1. You expect Jeff to educate himself before making an uninformed opinion? I said good day sir.

        1. My usual philosophy in comments sections is that I'm writing for the lurkers, not the commenters. If someone I'm nominally answering benefits, that's just bonus.

          And given how most news sources failed to give that background info, I'm not actually expecting anyone to know that we went through other channels and were stonewalled, or that (for example) we've been trying to get things adjusted since the Reagan Administration. The media has decided this is a "Trump Unilateralism" story, by gum, and fully informing the public undercuts that story.

          1. Don't mind Jesse. He is one of my stalkers.

            No I didn't know that background info and I really doubt Jesse knew it either, but he'll shit on me anyway for it.

            So thanks for providing some illumination on this subject.

            1. Lol. Narcissist with a persecution complex. Not good traits for someone who demonstrates such a breadth of ignorance. I don't stalk you dummy, I respond to dumb comments and call out ignorance and hypocrisy. You just happen to fall into both buckets a lot.

              If you stopped thinking trump did things on whims and actually read his speeches and policy stances (outside of five second Twitter/media soundbites) you wouldn't come off as so ignorant. This isn't something new trump has talked about in the last week. It takes intellectual curiosity which you have none of.

              I'm not the source of your intellectual laziness, I just laugh at it repeatedly.

              1. I never claimed he pulled out of this UPU treaty on a whim. That was you projecting.

                I asked why he decided to pull out of it completely and not instead try to re-negotiate it. YOU are the one who took that to me claiming "oh he just woke up one morning and said 'screw this treaty'". That isn't what I said and you know it. You just took the occasion to shit on me some more because you're totally not one of my groupies.

                You sure are defensive about this Trump fellow. You do realize Trump doesn't need your help to make him look good. He's a big boy, he can do that all on his own if he so chooses. He has a much bigger microphone than you anyway.

                And Trump doesn't have "policy stances", understood to mean a rational consistent set of ideas on a particular matter. Instead he has stream-of-consciousness word salads that his advisors and lackeys then try to assemble into something that is somewhat coherent and presentable.

    4. Why renegotiate it? Why is this a government thing? Why can't the individual postal service providers negotiate? Tons of those post offices are private organizations anyway.

      1. Many socialist nations control their post office agencies.

        Managed trade is the status quo, so making changes requires dealing with governments.

        Free trade would eliminate the government middle men but our trading partners refused Trumps offer for free trade.

        1. Yet Trump is leaving the UPU. Why can he leave the UPU instead of making things worse for Americans in the hope that he can make it better in the future but he can't do that with tariffs?

    5. Except that it was USPS Managing Director and Senior Vice President Paul Vogel that struck this deal with Hongkong Post, China Post (and subsequently South Korea and Singapore).....

      Read more at the USPS website....

      It's just another Trump lie in his charge for "nationalism".

      Anyone that believes anything that Herr Trump says is a complete dolt.
      He's a compulsive liar (not that all Politicians aren't).

    1. What would have been really interesting is if someone was prosecuted based on those annotations and they appealed the conviction based on the annotations not being available to the public for free.

  11. Good. I don't support taxpayer subsidies of U.S. goods and I'm sure as hell not in favor of subsidizing the ChiComs.

    1. Now if Herr Trump would just do something about that $110 BILLION yearly corporate welfare the U.S. keep increasing for the already ultra-wealthy.

      The U.S. government is perhaps the largest creator of the expense of the "commoners" (serfs).

      The largest money-management firms, like Vanguard, BlackRock, State Street, Fidelity, Invesco, JP Morgan, Morgan Stanley, etc. own the largest numbers of shares of the largest "competing" corporations in most every single industry.
      Their held corporate assets are among the largest campaign contributors, of both the "left" and "right".
      Their held corporate assets are among the largest spenders on government lobbying.

      Their held corporate assets are among the largest recipients of government subsidies.

      They buy Politicians, and get a healthy ROI on that investment.

      Trump (and his daddy before him) is included in this racket.

  12. I remember at the Trump rallies I attended about a third of us would be waving "Build the Wall!" signs, another third would be waving "Lock Her Up! signs and the last third would be waving "We Should Not Be Subsidizing the Postage Costs of Businesses in Other Countries, So Could You Pull Out of, or Perhaps Threaten to Pull Out of (in Order to Have a Standpoint to Renegotiate the Treaty), the 144 year-old Universal Postal Union in Order to Better Benefit This Country?" signs.

    Never thought those guys would get their thing done before we got ours.

    1. It was in the fine print.

  13. Just get rid of the USPS. It is a money sink anyway.

    1. Its in the constitution but that was when communication around the nation was important. Email is far cheaper and instantaneous.

      1. USPS is a 'can do' thing for government, not a 'must do thing'. There's never been an obligation to run a post, just the privilege for them to do it.

        And, as you point out, email is cheaper and instantaneous which is why no one will miss the USPS if it goes.

        Not even the 'elderly dependent on their Social Security checks' - those people can get on Direct Deposit like anyone else.

        1. And fed ex or UPS do a better job. If the government wanted to privitize the USPS they would easily find companies willing to take the job.

        2. The USPS could make a profit. They bring in plenty of revenue. The only reason they do not is because of government inefficiency.

          1. Absolutely echospinner.

            And agammamon said, the USPS is not required but allowed to be a duty congress can follow, if they choose.

          2. Well yes and no.

            Of course they suffer from all the usual inefficiencies of any government-run program.

            But they also have a mandate to serve everyone, and for the same price (at least for first class mail). Private companies don't have such a mandate. They are free to price out rural or underserved customers completely. (Which they ought to be free to do, by the way.) If USPS were free to charge rural customers the actual cost of delivering their mail, for instance, it would greatly help their bottom line.

            Either way, though, there really isn't a justification in this day and age for a state-run postal system.

            1. Us postal regulations are set solely by Congress and the us postal service. There is no constitutional requirement to serve everyone at the same cost in ignorance to actual costs. Lobby Congress if you disagree with the mandate or shut it down. The constitution says may, not must.

              This is why I deride you. You display a fundamental lack of knowledge when you jump into discussions. Learning the basics of your opponents arguments, and even your own arguments, is generally a good idea before engaging in public debate. But instead you mimic the style of leftists like Cortez.

              1. Did I say there was a CONSTITUTIONAL mandate to charge everyone the same postage rate? No. Work on your reading comprehension. You argue with me just for the sake of arguing with me. Because you're totally not my stalker groupie.

          3. 2011 USPS salaries:
            Postmaster $276,840
            President and chief marketing and sales officer $113,048
            Chief operating officer and executive vice president $235,000
            Chief financial officer and executive vice president $239,000
            Chief human resources officer and executive vice president $240,000
            Chief information officer and executive vice president $230,000
            Vice president and general counsel $230,000
            Vice president of delivery and post office operations $186,000
            Vice president of corporate communications $183,000
            And all for sucking ass & losing packages.

        3. The USPS makes sure that if you move, junk mail "providers" have your new address so they can keep up the steady flow of useless but recyclable material into your mailbox.

    2. It makes more sense to raise the price of bulk mail and deliver the reduced volume of mail 2 days per week instead of 6 days per week. This would make it feasible to replace all current workers with freelance couriers who 28 hours/4 days per week, covering 2 alternating routes instead of 1 route without government supplied health insurance. It would become the ideal job for young adults still on their parent's health insurance who want to get some exercise at work.

      The current structure of USPS is designed to maximize the number of trees we cut down to get junk mail into our landfills so that we maintain motivated union members who expect pensions.

      1. Mail delivery would be an excellent job for young adults to earn money for college.

        Its not brain intensive and they get good exercise.

        End student loans, so kids need jobs like this to earn some money to start their adult lives.

        1. End student loans

          I have never encountered a successful, decent, educated, informed American who opposes student loans.

          I have observed some disaffected, marginalized, anti-social, uneducated people express opposition to student loans.

          1. Oh this is over the top even for you, Rev.

            Student loans were perhaps well-intentioned at one point in time but they come with some serious flaws and market distortions, and I think nowadays it's even debatable if the intentions are noble anymore.

            You don't have to be a Rothbardian anarchist, or even a libertarian, to see the very serious flaws with the current student loan system. Such as how it leads to a large amount of debt for people when they are just starting out, how it fuels inflation in educational costs, how it creates another program for politicians to manipulate voters by jiggering with the loan interest rates, etc.

            Plus, it's just not in the Constitution.

            So no there can be honest disagreements between individuals on the propriety of the status quo with regards to the student loan program.

            1. "The Rev" doesn't do math. Or economics.

              1. For that matter, he doesn't seem to do much of anything but show up here and smear virtual feces on the walls.

        2. Poor kirkland.

  14. No sarcasmic to discuss how cheap shit from China is the only thing that matters?

    This is a great step where taxpayers are no subsidizing yet another thing.

    The other thing is that Amazon will likely step up their delivery service to avoid shipping rates.

    1. Now if Herr Trump would just do something about the $110 BILLION (and growing) yearly in corporate subsidies......which are just making the billionaires even that they can buy more special interest legislation.

      But hey, let's concentrate on the much lower PO subisdies. That'll fix the problem.......

      The U.S. gubberment has become a cash cow....and as such has attracted every shyster looking to control that massive windfall.

      But again, with our ponzi scheme economy, the only way to keep it functioning is to ensure fake money keeps flowing.
      Without these subisdies, the whole scam would collapse.

      We need a big ole reset button on the whole fucking government.......and Herr Trump aint it....he's more part of the problem (just like D'Ohbama, Clinton, Bush, and so on.....).

  15. In some ways, it is. Pulling out of the Universal Postal Union (UPU) means American consumers may no longer have access to deeply discounted Chinese goods?like $1 yoga pants,or thousands of other cheap, Chinese-made goods available through online retailers?shipped into the country at postage rates less than what domestic packages are charged.

    Well, as a *libertarian* - I'm all for this. I'm for getting rid of market distortions. Period.

    And having an international organization ironing out postal rates sounds good - if you're the sort of person who believes that an unaccountable international organization with no incentives to do any such thing can find the right 'Top Men' who both are smart and capable enough to figure out how much postage *should* cost and selfless enough to not bend to political and monetary pressure.

    Yes, in the short term this change might (will) be painful - but in the long-run it will be better, getting one more government agency out of control of our lives.

    1. Do a little research....
      It was USPS Managing Director and Senior Vice President Paul Vogel that struck this deal with Hongkong Post, China Post (and subsequently South Korea and Singapore).....

      Read more at the USPS website....

      What good does it do to abandon an unaccountable international organization when our own government is wholly unaccountable?
      Including dipwad-in-chief Herr Trump...........

      Plus I got news for's the ultra-wealthy that are controlling the government agencies, and Politicians, and government.
      It's called buying special interest legislation.
      Government regulations are most often called for by business groups as a profit booster.
      The same firms that own the greatest shares of the largest automakers also own the largest manufacturers of emissions control equipment.
      The more equipment, the more the markup on the more profit from making that equipment.

      Read more in the book A Republic No More by Jay Cost.

      1. Plus I got news for's the ultra-wealthy that are controlling the government agencies, and Politicians, and government.

        So the UN controlling it is better?

        As for the rest of your post - its basically gibberish. The parts I can understand don't address anything in my OP.

  16. Look, I get it


    Now, does anyone want to actually defend this outrageous subsidy of foreign shipments at below cost?

  17. I used to own a business that was created to exploit this treaty.

    Basically this treaty exists because when someone sent a letter from Amsterdam to Milan a Dutch Post office would collect payment o bring it to Belgium, Then Belgium would collect payment to bring it to France then France would collect payment to bring it to Italy then Italy would collect payment to deliver.
    Prices were not known and fluctuations occurred, so even if arrangements were made ahead of time, by the time the letter got to France, France may have doubled the price and the letter got sent back.

    This treaty allows the original postal service to set the price and collect and keep all the revenue.

    So now this same letter is transferred for free by Belgium, France and delivered for free by Italy. The Netherlands pockets all the money.

    This treaty also allows for simple customs rules.
    Customs declarations are required for items that are shipped or carried.
    Carry a laptop into a country for resale and you are required to declare it and fill out the paperwork and pay taxes.
    Ship a laptop, the same applies.
    Fedex would be considered "shipping" the same as a cargo container.
    Postal services are exempt from this. The laptop is simply put in the mail.
    The receiving country can inspect the contents and tax the receiver, but the customs forms are not required.

  18. My business used the postal service of a small Central American country.
    If I send a product to Australia, I would pay the postal service (lets say, $12), they would send it to LAX and then the USPS would pay to send it to Sydney and then the Australia Post would pay to deliver it to some Perth suburb.
    If I sent something to Greece, the postal service would send it to Paris and then France was required to pay to send it to Milan and then Italy was required to pay to send it to Athens and then Greece had to deliver it.
    All these postal services had to transport and track my package for free.

    Everything I sent to Asia or Australia (and some other parts of Latin America via Miami) the USPS paid for transshipment.
    Everything I sent to Europe, Africa or the middle east the French Postal Service had to pay.

    Every time an international package is sent to or through the US, the USPS is handling that package for free (equally, every time you pay to send something to Canada, the USPS collects all the money and Canada delivers it for free).

    There are winners and losers in this system, but the losers can increase the cost of international mail to their customers to make up for delivering and transshipping all the packages from other postal services that enter their system.

    How Trump intends to charge China for its mail to the US (or Latin America, the mail to Chile or Panama will go through the US), he does not seem to explain.

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