Trump's withdraw from postal treaty could increase online shopping prices

Posted at 3:22 PM, Oct 18, 2018

Some of the things you buy on eBay or Amazon could be going up in price, but President Donald Trump argues it will be better for American business.

President Trump plans to withdraw from an old postal agreement that has allowed Chinese companies to ship small packages to the United States at a discounted price, often cheaper than what it costs for Americans to send things.

“Products coming in from China, for instance, can come all the way from Shanghai to L.A. and have to pay a lower cost than if you or I wanted to ship a product across the street,” says Linda Dempsey, the VP of international economic affairs at the National Association of Manufacturers.

The National Association of Manufacturers says the move will only impact smaller items, say for example, yoga pants on eBay. This particular example only costs a dollar, plus there’s no charge for shipping, although they’re coming from China. But, while you might not pay for shipping on this particular order, you’re paying for it in other ways you might not know about.

“We might not see it in that package, say of yoga pants that's being shipped, but we're paying the subsidy through taxpayer dollars,” explains Dempsey. “We're paying for it as consumers when we go to the postal service and send a small package. We're paying higher rates for that because the postal service is being forced to subsidize these foreign shippers into the United States.”

Critics also argue the cheaper rates hurt American businesses, and the president's proposal could help keep or create jobs in the United States.

“It gives manufactures a fair chance at competing in the U.S. systems,” says Dempsey.

While prices might go up for some products, there could be an upside for consumers.

“We'll see how much those packages go up in terms of the foreign packages coming in,” Dempsey says. “We'll also be looking to see if the package prices for U.S. shipments will be going down.”