The deepening trade war with China has once again threatened to send consumer prices sharply upward. President Donald Trump has ordered the U.S. Postal Service to withdraw from a treaty setting the shipping rates with nearly 200 countries.
The 144-year-old treaty determines the rates paid by various countries for package delivery to customers in other nations. The treaty sets different tiers which make developed countries like the U.S. pay higher rates while the less developed countries get a discount. In a carryover from when China was not that much economically advanced as it is now, it is rated lower — which sometimes led to some major head scratching in the market.
Big companies like Amazon and FedEx have long taken issues with the treaty. They stressed on unfairly discounted shipping rates for foreign shippers.
The American manufacturers would be one of the beneficiaries of the new policy. They have long advocated for the leveling of what they see as a very unfair playing field.
Mighty Mug was the the poster child of the movement which seemed to help overhaul the rates. It is a patented spill-proof travel coffee mug. It cost $6.30 for the U.S. company to ship by regular mail from New Jersey, the company CEO Jayme Smaldone wrote earlier this year in February. However a Chinese company that sold a knock-off version was able to ship it to the same location from 8,000 miles away for only $1.40.