Why Manufacturers Applaud President Trump’s Commitment to Eliminating China’s Unfair Postal Subsidy

By October 19, 2018Shopfloor Main

President Donald Trump announced Wednesday he plans to withdraw the United States in one year from the Universal Postal Union (UPU)—the U.N. agency responsible for establishing the framework for global postal operators to exchange mail—unless significant changes are made to the UPU’s “terminal dues” system.

That system, designed at a time in which ecommerce simply did not exist, has in recent years allowed Chinese counterfeiters to ship small packages to the United States at a highly subsidized rate. It is in dire need of modernization.

The president’s action is important for manufacturers and consumers across the nation who have struggled to push back against the growing menace of counterfeit goods—and even dangerous drugs—pouring into our country through our own postal system from countries like China. While this strong activity proceeds on the international stage, multiple agencies back home will be undertaking an intense effort to help the American innovators who have been displaced from online marketplaces by counterfeiters by adopting fair and nondiscriminatory rates for international shipments.

As a result of the president’s action, we expect to see the explosive growth in counterfeit items popping up on online platform ecommerce sites to slow significantly. This slowdown will occur partly as a result of eliminating the economic subsidy and partly as a result of increased enforcement capabilities enabled by the STOP Act, new legislation that we expect the president to sign next week that will enable far better tracking of illicit inbound packages. As platforms contend with fewer knockoffs, they should be able to better target their resources to the problem areas that remain. Adopting fair rates is not a panacea, but we expect the results to be noteworthy nonetheless.

In the meantime, manufacturers are thrilled to see that this issue has been elevated to the very highest levels in the administration, with the president himself instructing key members of his Cabinet to take the initial steps to finally fix this broken system. The NAM and its member manufacturers look forward to working with all of the parties involved to make sure that the Postal Service and its regulator focus first on fixing the unfair inbound routes that do the most damage to manufacturers in the United States, with the ultimate goal of creating a fair and nondiscriminatory environment for shipping around the world.

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