President Donald Trump argues that the 144-year-old agreement benefits China and other countries at the expense of U.S. businesses - making it cheaper to ship packages from Beijing to NY than from San Francisco to the U.S. East coast, which particularly benefits Chinese manufacturers.
Trump has blamed the huge deficits for the loss of millions of manufacturing jobs and vowed to attack unfair trade practices and renegotiate trade deals on better terms for the United States.
The manufacturers association boss had sent a letter in April to U.S. Treasury Secretary Steve Mnuchin complaining that the UPU system allows China to receive increasing subsidies from the U.S. Postal Service, which it says cost the USPS $170 million past year. Navarro has encouraged Trump to crack down on China on a variety of trade and political questions that he has argued are disadvantaging the U.S. at China's expense.
A growing US economy and falling unemployment have also whipped up demand among US consumers for imported goods, with 2017's record US-China trade deficit continuing to widen this year - swelling 3.2 per cent to us$390 billion in the 12 months ending in June. -China trade deficit and exit multilateral agreements that don't favor the United States, President Donald Trump began the process Wednesday to withdraw from a 144-year-old global postal agreement that lets Chinese retailers mail small packages to the US for rock-bottom prices.
Labelling China a manipulator would be a fresh sign of confrontation from Washington but any actual repercussions would be gradual.
The move comes as the USA has imposed tariffs on $250 billion in Chinese goods and Beijing has retaliated by targeting $110 billion in US products. "It is often possible for a Chinese company to sell "knockoff" products through online vendors, such as Amazon or Alibaba, to USA consumers for less than it costs for American mailers to ship authentic goods".
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The price of shipping a 4.4-pound package, the largest parcel covered by the treaty, from China to the United States is about $5, according to US estimates.
They argued that the treaty allows foreign postal services, especially in China but also in Germany, to take advantage of cheap shipments to the US.
Consequently, U.S. consumers often purchase Chinese goods offered with free shipping.
The existing worldwide postal system makes it cheaper to ship a package from China to America than from one side of the United States to the other.
USA manufacturers applauded the move.
"Manufacturers and manufacturing workers in the United States will greatly benefit from a modernized and far more fair arrangement with China", Jay Timmons, the president of the association, said in a statement. "How can my government be subsidizing China and driving me out of business?"