Economy

Trump’s Next Trade Blunder Could Dramatically Increase the Cost of International Shipping

JM Ashby
Written by JM Ashby

The Trump regime announced last night that it will withdraw from the Universal Postal Union next year if the more than a century old treaty is not tailored in unspecified ways.

Critics say the treaty -- which allows foreign countries like China to ship packages to the United States at a reduced cost -- is unfair to the domestic shipping industry, but there's always a catch.

President Donald Trump argues that the 144-year-old Universal Post Union benefits China and other countries at the expense of U.S. businesses — making it cheaper to ship packages from Beijing to New York than from San Francisco to the U.S. East coast, which particularly benefits Chinese manufacturers. The officials say the treaty is used by shippers of the narcotic fentanyl to the U.S. from China.

The U.S. is willing to renegotiate the treaty over the next year but will leave the union if no agreement can be reached, the officials said.

The catch is that withdrawing from the treaty would not mean domestic shipping will suddenly become cheaper as a result. All it means is international shipping would become more expensive. That means it would become more expensive to buy products from overseas not including the additional price of Trump's tariffs.

In all but name, it would be a tax on top of another tax (Trump's tariffs) on American consumers.

I'm not necessarily going to argue with someone who says it's unfair if international shipping is cheaper than domestic shipping in some cases, but none of this happens in a vacuum. Making international shipping more expensive means domestic retailers could also charge more for things. At some point, the American public has to weigh how much they're willing to pay because Trump's trade policy is a path toward making virtually everything more expensive.

The good news is there's a fairly high chance that Trump won't withdraw from the postal union. Recent experience tells us he may just try to rename it.

  • muselet

    The Universal Postal Union is just another thing Donald Trump doesn’t understand and therefore hates.

    It wouldn’t be surprising if Trump wants to withdraw because John Bolton just told him the UPU is part of the United Nations.

    –alopecia

  • Username1016

    This is totally off topic, but Bob Cesca never writes this blog anymore… wondering why? No complaints about Jordan, I appreciate his analysis, but I appreciated Bob’s analysis too. (Yes, I listen to Bob’s podcasts!) You had another writer for a while that I didn’t like as well, but that’s getting on for years ago… Signed, Fan Since 2008 (has it really been that long!)

    • JMAshby

      You can still read Bob’s analysis at The Daily Banter and occasionally at Salon. He also tweets more than I do these days @bobcesca_go

      I assume the other writer you’re referring to is Mr. Brink. We honestly have no idea what happened to him. He disappeared and my own attempts to contact him failed. His social media accounts have been inactive for 4 years so, after a while, I kind of assumed the worst, but I honestly don’t know. It’s unfortunate because I personally enjoyed his style.

      • Username1016

        That’s right, Mr. Brink. I never could put my finger on why, but his tone grated on me a bit. Still I hope he’s okay 🙂

        I got addicted to this blog and also Paul Krugman’s column when the financial crash hit in 2008. I was on vacation in a remote state park, with no access to TV or internet or national newspapers — the world was ending and I had nothing but a clunky flip phone where I could read a tablespoonful of news at a time. Yow. Still a daily reader ten years later.