Economy

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

Written by SK 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.