National Security

Trump Yanks U.S. Out of Deal That Gave China Big Shipping Discounts

American consumers could see higher costs for clothing, household goods, electronic gadgets if new agreement is not reached

Chinese manufacturers soon will no longer enjoy shipping discounts on products they send to the U.S. as President Donald Trump takes another step in his campaign to redress America’s trade imbalance with the Asian giant.

Unnamed U.S. officials told Bloomberg News on Wednesday that Trump “sought to revise the treaty in September and was rebuffed by other nations, prompting the decision to withdraw.”

Current shipping rates will continue in force as it takes a year for a country to withdraw from the agreement. Efforts will continue to renegotiate the rates during the year, but The New York Times reported the U.S. will “self-declare” new rates to be charged on shipments from China to this country.

China and other less-developed nations around the world enjoy deep discounts under the Universal Postal Union Agreement, negotiated in 1969. While the agreement is intended to give Asian and African countries incentives to develop their economies, China has used the discounted rates so effectively that it now accounts for 60 percent of the packages sent to the U.S.

Related: Who, Us? China Diplomat Ducks When Asked if Beijing Interfering in 2018 Election

Consequently, U.S. consumers often purchase Chinese goods offered with free shipping. The result could be an increase in prices on many household goods, consumer electronics, and clothing if a new rate schedule is not agreed upon.

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The decision to pull out of the agreement was pushed by Trump senior adviser Peter Navarro, who is a long-time advocate of tougher trade measures against China, according to The Times. Trump previously has announced tariffs against Chinese goods estimated to be worth $250 billion.

The president argues the U.S. loses as much as $800 billion in cash going to China every year as a result of the trade imbalance between the two countries.

Trump and China’s President Xi Jinping may meet during the G20 summit in Buenos Aires, Argentina, on November 30 to December 1, and the topic of shipping rates is certain to be on the agenda if they do.

“It’s important to remember who started this trade war. China never wanted a trade war, but if somebody started a trade war against us, we have to respond and defend our own interests.”

China’s Ambassador to the U.S. Cui Tiankai told “Fox News Sunday” host Chris Wallace that there is no trade war between the two countries, but then seemed to contradict himself by claiming America started it.

“Well, we do not have a trade war with any other country, including the United States. The fact is, through the bilateral trade agreement with the United States, you know how much benefit American consumers have got with trade with China over the years and how much money American companies have made from operating in China. You have to look at the whole picture,” Cui said.

Then Cui observed, “It’s important to remember who started this trade war. China never wanted a trade war, but if somebody started a trade war against us, we have to respond and defend our own interests.”

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