Trump Looks to Level Playing Field With UPU on International Postage Rates

As he reviews the report from his U.S. Postal Service task force and weighs next steps including possible privatization, President Donald Trump has now set his sights abroad in pursuit of more equitable international postage rates, according to media reports.

Ahead of September meetings of the Universal Postal Union, Trump in a memo to the heads of four government agencies directed them to seek changes to the discount system that has been rewarding foreign merchants, principally but not exclusively Chinese, at the expense of U.S. companies.

Under the current UPU system, it costs far less for a foreign seller to ship an item to a U.S. destination than it does for a domestic company to send to that same address, creating a disparity tilted in favor of overseas merchants. The UPU is governed by the United Nations.

The so-called “terminal dues” collected by the USPS to deliver small parcels under 4.4 lbs. from overseas companies are steeply discounted under the UPU rate structure compared to actual costs, making it easier for them to undercut domestic sellers.

“The increasingly competitive and commercial nature of the market has exacerbated these longstanding distortions,” Robert Taub, chairman of the Postal Regulatory Commission (PRC), told the Wall Street Journal. “President Trump’s memorandum represents an enormous leap forward to finally addressing these problems.”

Among other things, Trump’s directive seeks full reimbursement of costs to the USPS and an end to preference for foreign shippers. If satisfactory results aren’t gained at the UPU meetings in Ethiopia, Trump will consider calling on the PRC to set its own market-based rates on inbound parcels from other countries. He has directed the agency heads to come back with recommended actions by Nov. 1.

Growing complaints from U.S. merchants about the UPU favoring Chinese sellers, especially of knockoff goods, is what precipitated the Trump memo, according to Bloomberg.

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