It is their prerogative, either way. I always assumed it was them paying the subsidies all along.

Not sure why you're being downvoted; that's a perfectly reasonable prediction. If shipping costs start reducing shipments of goods to the US by any appreciable amount, and the Chinese government wants to offset that, a subsidy is a reasonable way for them to do it. And I'd much rather the Chinese government subsidize their citizen's postage than the US government doing it for them.

China would need to use their foreign reserve to do this subsidy. Ignoring belt and road all of China's internal industry subsidies use Yaun. Belt and Road use dollars but are "lent" thus in theory China is not reducing its foreign reserve.

Problem for China as we see in their capital controls is maintaining wealth in Yaun. Any subsidy which requires using foreign dollars, as paying the US postal tarrif would, weakens the states stability.

Costs will still go up. FBA may increase costs even more since the item would have to be shipped twice plus pay Amazon's vig.

If only FBA didn't have an effective minimum of about $5.