Trump Plans to Withdrawal from China Shipping Treaty

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(Bloomberg) – President Donald Trump plans to withdraw the U.S. from a treaty that gives Chinese companies discounted shipping rates for small packages sent to American consumers, another escalation of his economic confrontation of Beijing.

A White House announcement is expected Wednesday, according to a person familiar with the matter. The New York Times reported earlier that Trump would withdraw from the treaty.

“President Trump deserves tremendous credit for the administration’s focus on eliminating the anti-US manufacturer subsidy China receives from the U.S. Postal Service,” Jay Timmons, the president of the National Association of Manufacturers, said in a statement. “This outdated arrangement contributes significantly to the flood of counterfeit goods and dangerous drugs that enter the country from China.”

The group said the discounts amount to a subsidy for Chinese shippers that cost the U.S. Postal Service $170 million in 2017. The treaty sets fees that national postal services charge to deliver mail and small packages from other countries. Poor and developing countries are assessed lower rates than wealthier countries, an arrangement that has benefited China.