Commercial recipients know about brokerage fees and can estimate how much the surcharge will be, but Joe Random has no idea and will complain.
I'm having trouble imagining what positive result could come out of this that outweighs the downside of fracturing the global postal system.
We're the most powerful nation in the world, not a toddler. "He made me do it!" isn't an argument for adults. We're responsible for our own actions. China may have made a bad decision, but that doesn't give the US a pass for making an even worse decision.
Yeah, china "made the US do it" in the same way that a car dealership "makes you not by a car" when they don't give you the deal you wanted, but I don't really see why that means the dealership is doing anything wrong.
I'm not familiar with it personally, but an adult sometimes has to say "No, it's not fair, but it's not that big a deal, and the damage caused by throwing a tantrum over it isn't worth the sop to my pride."
"According to the Postal Regulatory Commission, the independent agency that rules on postal rate proposals, the loss to USPS attributable to terminal dues reached $134.5 million in fiscal year 2016 and $170 million in fiscal year 2017"
Spending over $170 million a year (and rising, especially with the massive yoy increases of packages shipped from China) and making it easier for your largest (by far) economic rival to sell in your country than companies that are established in your country is pretty terrible, I would argue.
You can't weigh two options if you only know the weight of one of them.
Either the price different isn't a huge deal, and China should just pay the cost of the shipments, or the price is a big enough deal that China finds this extremely unfavorable, and "the US should just keep doing it because it's not a big deal" no longer applies.
It may well be that there's no major downside for the US, or for anyone except China. If you can show me evidence of that, I'd love to see it! But this administration has a history of rash, unconsidered actions based on nothing more than pride, so I don't think it's unreasonable to want to see that evidence before I take them at their word.
That's true, but this is a discussion about what the US should do to protect US interests, not about what China should do to protect Chinese interests.
This is exactly the childish "well they started it!" attitude I'm talking about. China is not going to look out for US interests, nor even should they. The US has to look out for US interests, and the US needs to do that by weighing our options and choosing the ones that make sense, not by blaming China and trying to exact petty vengeance.
I don't know what the right thing to do here is, but the only way one possibly could know the right thing to do is by comparing the costs of our options, and there's a complete lack of information on this thread about what the costs of leaving the global postal union are. If you don't know what those costs are, you aren't informed enough to have an opinion on whether we should leave, period. And whining about what other countries do should have no place in deciding what we do.
Have some pride for god's sake, take responsibility for your own choices and stop blaming other people.
Of course the US should look out for its own best interests.
It is far from clear that leaving the global postal union is in our best interests, however.
> China refused to negotiate, believing that the US would never pull out and that they had all the leverage.
Given US dependency on Chinese products, I don't think we can clearly say that China doesn't have all the leverage.
> Keep subsidizing packages for their main economic rival? Sit back and do nothing while China continues to benefit?
Keep in mind that subsidizing packages from China is also a subsidy to US consumers of Chinese goods. Americans benefit from this too. And leaving the global postal union affects a lot more than just our relations with China.
So yes, maybe continuing to subsidize packages from our main economic rival is better than leaving the global postal union.
I don't have all the facts here, so I am not sure I know what's right, but I have enough facts to see that only looking at how fair or unfair things are doesn't give you the whole picture.
The only downside you have mentioned explicitly is that "US customers may pay more for shipping" is clearly false. The money for that subsidy has to come from somewhere and it has been coming from US customers paying more for domestic shipping.
Well, given the number of products we buy from China, this sounds like it's going to make things more expensive for US Citizens.
> If you aren't getting those products from China, they'll come from somewhere else.
...for a higher price, probably, which we will pay.
So no, it won't make things more expensive for most consumers. There's a high likelihood that you've never received anything from China by mail.
I'm just saying that it won't have a large negative impact on consumers or overall trade volumes. If anything I'm defending.
This is extremely tiresome.
And further to the point of impact on trade volumes: a good number of those purchases will instead just happen on amazon or wherever, and will still be of products originating in China: they'll just take a different path into the country and potentially be more expensive.
By your logic, the entire postal system is a "niche" in the overall economy. That doesn't mean you should ignore it.
Stuff shipped from China through the postal system isn't a "niche", it's an enormous volume of mail, and it's the very reason our postal rates are so damn high.
>they'll just take a different path into the country and potentially be more expensive.
How exactly is this a problem??!! The whole problem is that it's unfair trade for postal customers to be subsidizing people buying stuff on AliExpress. If someone wants to import shipping containers full of cheap Chinese stuff and resell it within the US, that's fine: it's way more efficient and ecological than drop-shipping from China. It doesn't work right now because the postal rates are so horrendous for domestic postage, but if we stop subsidizing Chinese shippers, then that should change.
Why are you all so defensive about this?
C D
C (5, 5) (1, 7)
D (7, 1) (0, 0)
Sometimes credibly threatening to perform an action involves actually following through with the threat.
Let's stick to looking at the situation in front of us instead of imagining ones that don't exist.
It may or may not map to the situation here, but IMO that's irrelevant. Personally, I think it maps pretty well.
No, I sure wasn't.
Obviously there are situations where flipping the table is the right choice. This probably isn't one of those situations.
That's the tie-in with prisoner's dilemma, you see? Only by making the other party aware that negative consequences are dire, certain, and soon can an equitable outcome for both parties be achieved.
I would note that China has already leveraged government borrowing power to the hilt in order to artificially support their stock market prices, leaving them almost no room the maneuver.
You argue that this it is childish for us to force the issue. No. Wrong. It's game theory. Do you want a good outcome?
I feel like I should point out that the example I posted differs from the classic prisoner's dilemma by making the differential utility of moving to the defect, defect state negative for both parties. Normally, defection improves the defector's utility, so that space would be something like (3,3).
Still game theory though.
No, I don't argue that at all. I argue that it's childish to say China is forcing us to do this.
I also said it's foolish to only look at the cost of continuing to subsidize Chinese imports, and not ALSO look at the cost of leaving the global postal union. Your post shows that you continue to only look at the former costs, and have yet to even acknowledge that the latter has cost.
Incidentally, looking at ALL the possible outcomes to choose your action is exactly what game theory about, so don't cite game theory as if it proves your point when in fact you're refusing to actually use game theory.
Which is why the correct response to all requests for a contract re-negotiation is "Great - let's meet, because I also have some terms I would like to see changed."
That really depends on the economic and other consequences of flipping the table. Dies a single, albeit large, bad actor like China warrant a table flip? What proportion of mail comes from them and what from developed nations with whom we'll need to come to new agreements, drastically increasing the friction of overseas shipping to everyone involved?
I'm not sure this is the wrong move, in fact I think it might be the right one, but that's my gut. It doesn't seem like a real economic impact analysis has been done though, and that is problematic, making this seem much more politically motivated than from a position of careful consideration of what's in our best interest.
I purchased a temporary replacement phone via a website that claimed to ship domestically in the United States when it was actually shipped from China. There were several issues with the phone, but to return the device I would have been on the hook for over $100 in shipping. The credit card company refused to help through their purchase protection coverage because I had not returned the device.
How was it ever in our interest to force our e-commerce retailers to subsidize shipping for Chinese e-commerce retailers?
That's actually pretty hard to answer it seems. I can't find any straightforward chart from either USPS, or other research that would show the packages volume by year and country. Does anyone know of such source?
I don't see the problem here, nor why the proportion matters at all. The simple fact is that shipping from the US to anywhere else in the world costs a fortune. So flipping the table can't possibly make it any worse.
This isn't some whim of the current administration. The United States has been trying to correct this for decades.
It might have been in the works for decades, but the current administration is why it is actually happening in 2019, instead of getting perpetual postponements, hoping to resolve things amicably, without major economic disruptions.
I'm a bit surprised they haven't moved toward recognizing Taiwan as independently sovereign, and I'd bet that someone is carefully redacting any allusions to the fact that Taiwan exists from all briefings, and begging Fox News daily to keep any mentions of it off the air.
Trump wants a trade war, not a real war.
One only has leverage if the other side thinks one might flip a table, which requires a periodic demonstration.
That is to say, we should be looking at the results of leaving the global postal union, rather than just reacting because it's unfair.
This was years ago. I believe that the man now has anti-depressants to help him control his emotions a little bit better.
These are negotiations, not flipping the table.
Genuinely asking because I am unfamiliar with these issues.
I think it actually does; what the President (assuming he is actually trying to acheive what he overtly claims to in negotiations, which is far from obviously true) seems not to understand about international negotiations is that while it can be very useful to make the other side believe you will walk away from a deal if they don't bend far enough, making a public threat to do so that makes it hard for them to claim victory (particularly, to their domestic constituents) when a deal that is actually in your favor is reached makes it politically difficult for them to compromise.
And this is true for authoritarian regimes as well as democratic ones; the absence of electoral accountability doesn't mean that domestic support is irrelevant (it just means opposition lacks a nonviolent safety valve), and even in regimes that tightly control public information, influential elites which the leadership wants to keep in line will generally be aware of public information from outside of regime channels.
However, the "traditional" way doesn't work either. Case in point: EU puts tariffs on a wide variety of US goods -- tariffs that have been in effect for decades. The EU, even before Trump, charged a 10% tariff on US cars, while the US only charged a 2.5% tariff on European cars. The EU taxed US apples at 17%, grapes at 20%. Clothing, and all sort of other products are and were heavily taxed. California and other American wines are taxed at double the rate of EU wines entering the United States.
"Trump invented tariffs" is the the current media narrative, but it's not even close to being true. The EU taxes the hell of US goods. Try to ship a spare part of a child's stroller from the US. I paid a $40 tax for a part that cost me $25. Duties, tariffs and other taxes are oppressive and the US should fight back. If the EU doesn't want tariffs -- they can eliminate the taxes they've historically put on US products. But they only complain now because Trump is trying to play their own protectionist game.
So Trumps's "real estate" approach is a pretty novel one -- and one that has actually forced the EU to negotiate in good faith, unlike the decades were US products were taxed unfairly. The EU has tariffs on almost everything -- I'm not sure why Trump is the bad guy in a trade war here. Trump is just the first president to actually stand up to the EU when it comes to trade.
Why the hell the EU can get away with decades of tariffs and doing things like subsidizing Airbus illegally[1] is beyond me. Trump is the "bad guy" because he actually cares about American interests before those of the EU? How crazy. The EU member leaders are welcome to look after the best interests of their countries as well. There's nothing radical about that.
The US should fight back? Shouldn't EU consumers fight back against the actions of their government?
If a European country has a 10% tariff on American-made autos, who is the victim? The European auto buyer. Who is the beneficiary? The stockholder of the European auto manufacturer.
That's not the narrative. The narrative is the Trump idiotically thinks he can win a trade war through escalating high tariffs if his demands aren't met immediately. He is looking for short-term benefits instead of long-term benefits.
(The obvious caveats apply: no idea if this applies in this particular instance; this doesn't mean that withdrawing from international agreements is always the appropriate step for the US to take; other voting systems have their own problems)
Because any nation that isn't on your side is corrupt, right?
Do you have experience living in countries where you need to bribe everyone everywhere to get anything done? You're missing the point, and I doubt you're speaking from any sort of authority when you say these decisions are not made via shady backroom deals.
Yup, two years in India over a decade ago when it was much worse than it is now.
At the end of the day, a country will ally with or back the country from which they can extract the maximum benefit. Game theory applies.
Many Pacific Island countries (many of the tiny countries you allude to) have benefited greatly from switching allegiance to China. In contrast, the US has much bigger fish to fry (billions in aid to Israel supposedly for mid-east stability) and paid these tiny nations no attention whatsoever over the past few decades.
> Do you have experience living in countries where you need to bribe everyone everywhere to get anything done? I doubt you're speaking from any sort of authority when you say these decisions are not made via shady backroom deals.
Do you mean like the US, where unlike anywhere else in the world, bribery (cunningly called lobbying) is both completely legal and publicly accepted?
I also wonder how the private couriers (UPS, FedEx, DHL, etc.) will react to this. Do they currently under-price a bit for shipments from some countries to the US in order to compete better with USPS? If so, they might consider raising prices if this goes through.
At the end of the day, though, shipping costs should accurately reflect the effort it takes to ship, and not be artificially depressed unless there's a good reason. It seems like (at least in the case of China) that good reason (under the assumption it was good in the first place) expired decades ago.
Right, which means that if other companies are selling similar products they can more fairly compete, since the cost of the Chinese product was literally being subsidized.
I see a lot of conversation about how "terrible" it is that tariff or shipping costs will be passed on to the US consumer, but I don't think that's an accurate picture. On one hand, sure if you can only buy a product only from China, then perhaps the company importing it and the company exporting it may raise prices to compensate. They may also not, because you might decide to find a substitute product or because a competitor's product becomes more attractive. They may raise the price, and then Chinese products become less competitive in the U.S. market anyway (assuming there are ready alternatives, which generally there is). Alternatively a higher price means that there may be more participants in the market since there is profit to be made. If prices are artificially low and you can compete on cost with exploitive labor, that's a market inefficiency that should be corrected.
For some reason people have this expectation or entitlement mentality that all of this stuff should be cheap, built on the backs of people who work incredibly hard for not a lot of money. Products naturally should be expensive unless labor is being exploited - people need to be paid a living wage, have good work conditions, and a great life. If that means buying a new set of wine glasses costs $25 instead of $4.99, then you need to spend money more wisely, or not buy the wine glasses, or make sure that you really want the wine glasses. Cheap products based on cheap fossil fuel energy and cheap, exploitive labor fuel consumerist consumption patterns.
If I live in America and my mother lives in some far-flung country, the idea is that we should be able to send each other letters at a cost that is proportional to typical incomes in our nations.
Both e-mail and e-commerce totally turned this on its head -- letter volumes went down, and we started buying things from China (as opposed to making things and sending them there). I agree that something needs to change, but I'm worried that the end result is other countries will just stop accepting Americans' mail.
It's worth noting that China is maybe #80 in GDP per capita?
I've had a couple hundred small packages (components for prototypes, tools, etc.) shipped via China Post in the last few years, and only 2 of them arrived in less than 3 weeks. Several didn't arrive at all. I'm not willing to pay as much for that kind of service as I am to send a package from e.g. Chicago to NY with fast and reliable delivery.
The rates are probably unfairly low, but you can't look only at the price. You have to look at price, delivery speed, and reliability at a minimum.
I guess I'm saying that China Post packages are not going from LA to NYC in X days, more like 2X or 3X and sometimes up to 5X. The rates are probably still too low, but I haven't found any authoritative numbers.
It's a bit like all the fear mongering about Japan in the 80s. The hard truth is that Japan was way too small to be a threat.
China, on the other hand, is much bigger than the USA. The fact that the USA are currently so much stronger than China is therefore the anomaly in a historical perspective.
The fact that China is still relatively poor per capita while already being the 2nd largest economy overall shows the potential they have left to become the world's central economy (along with India's)
Squabbles about postage rates are distractions.
If your population keeps growing, you can keep some semblance of a pyramid shape. But if it's stagnant, and your people reliably survive into old age...
Switzerland's population might grow faster than the US's at some point, for example, but that'd be irrelevant because it is way too small in any case to threaten the US's position.
EDIT: I ask because the Chicago-NY price is >100% above German international rates. >100% is a big number and German prices are high to begin with. That makes "part of" too fuzzy for my taste.
Meanwhile, the US Postal service is a quasi-government agency that is predictably a mess. On one hand it is supposed to be self-sufficient but on the other hand it is burdened with federal agency restrictions or limitation. And, it distorts the mail market in general by having a government granted monopoly on regular mail.
Yes, but it puts American consumers at an advantage! Are there more consumers or businesses?
I only hope the small Chinese sellers will be able to send their packages thru Malaysia or Vietnam for reasonable rates.
I've noticed that some of my eBay purchases of Chinese stuff come via those countries, at least according to the return address on the package.
Most American consumers are dependent on American businesses (including American subsidiaries of multinationals) for income, whether through labor or capital.
No, US customers are paying either way. Lower cost shipping from China was paid for by higher cost domestic shipping. AFAIK the USPS is not subsidized by either the American or Chinese governments.
Interesting perspective. I can see a parallel with healthcare insurance:
- one big non-profit subsidized provider -> cheap baseline service for the masses, third party providers cover for the niches of the market, third party providers forced to innovate
- lack of subsidies/regulation -> expensive baseline service for the masses, essentially the subsidy that gave you cheap service now becomes profit for the third party providers, no need to innovate when you can comfortably get rich by inflating the baseline service prices
I don't know how that works. If you don't know the effects, how can you know it is a good action? Knee jerk actions tend to poorer results than well planned ones.
Characterizing decisions made with incomplete information as "knee jerk" reactions is a bit much. That isn't to say that a certain amount of effort should be made to understand the consequences of any decision.
Switzerland is planning on charging receivers for the extra postage to make up for the huge losses until the postage union changes the rules. Why doesn't the US do something similar? They don't seem to have a problem applying tariffs on imports.
I'd like to know more, do you have a source? Could not find via Google.
Many postal services have a charge for customs clearance services, but I haven't heard of anyone charging extra postage yet.
> Why doesn't the US do something similar?
The U.S. STOP Act of 2018 established a fee of $1 for inbound EMS parcels starting in 2020 to cover customs processing costs. https://www.govtrack.us/congress/bills/115/hr5788/summary
But as noted, customs processing fee is a bit different from charging extra postage. And I believe small letter post items are the bigger issue, not EMS.
I may disagree with Trump on almost everything, but this might be the one area where I actually agree. I have no idea whether this is the best or most effective approach, but I do agree that this is an issue that needs to be fixed.