You could make the argument that China, who refused to negotiate with the US, was the party that fractured the global postal system as they forced the US to take such drastic action. What other options did the US have? They've already tried work it out amicably.
> You could make the argument that China, who refused to negotiate with the US, was the party that fractured the global postal system as they forced the US to take such drastic action.
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.
Why would the US not look out for its own best interests? China and the US were in a deal where the only way for the US to be in a favorable (or even just not-terrible) position was to re-negotiate a deal that was made almost 50 years ago when the world was significantly different geopolitically, even more so with regards to China. China refused to negotiate, believing that the US would never pull out and that they had all the leverage. What other option does the US have? Keep subsidizing packages for their main economic rival? Sit back and do nothing while China continues to benefit?
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.
> Why would the US not look out for its own best interests?
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.
With an obviously unfair trade agreement that has facilitated numerous well documented frauds and abuses, the obligation rests with those who claim that staying is beneficial to provide evidence to that effect.
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.
How terrible was it exactly? What would be the consequences of it continuing, and what are the consequences of its ending?
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."
There's an entire section in the article about how bad it is for the US. One excerpt:
"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 didn't answer the other question, which is just as important. What are the consequences of it ending? Not just to China, but to the US and the world? The article doesn't address that except to say "Beijing may retaliate" and "USPS wants to establish agreements with foreign posts."
You can't weigh two options if you only know the weight of one of them.
You could make the same argument about China. Why shouldn't they just agree to no longer be subsidized in exchange for keeping the US in the trade agreement?
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.
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.
I haven't even made a firm argument yet. I'm trying to find out what's actually in the balance so I can make an informed decision.
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.
Let's imagine a game with the following payoff matrix:
C D
C (5, 5) (1, 7)
D (7, 1) (0, 0)
If your opponent is defecting, you get one point and they get seven. If you defect on top of this, you both get zero - but everyone cooperating gives you both five points. Credibly threatening to defect, even though defection harms you, is the only way to convince your opponent to move to cooperation from defection.
Sometimes credibly threatening to perform an action involves actually following through with the threat.
It fails when the other party is aware of the strategy and broadens the context of the game to flip something else that you care about.
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."
I disagree. According to the article, the USPS is subsidizing Chinese imports to the tune of approximately $150,000,000 per year. We have exhausted all other practical approaches to resolving this outrage. China will not budge unless they know they have to.
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?
> That's the tie-in with prisoner's dilemma, you see?
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).
> You argue that this it is childish for us to force the issue.
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.
Well, at a minimum it makes goods from China more expensive and drop shipping from China no longer makes sense for many products. If you aren't getting those products from China, they'll come from somewhere else.
Very few items bought from China come via the postal system: they're primarily moved by freight to USA fulfillment centers and then shipped domestically when orders come in.
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 have ordered things from aliexpress. I've ordered orders of magnitude more stuff from Amazon. That's my point. A number doesn't have to be zero to be practically insignificant.
How many products are directly shipped from China through the postal service? The answer is very few. This will have little to no impact on trade volumes overall, since they're largely moved as freight.
Yes, that's exactly my point. It's a niche, and that niche is much much much smaller than the overall category of "things that were imported from China".
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.
It's not about having a huge impact on trade volumes. It will have an impact on small stuff and drop shipping. Why should we stay in a bad deal that was made fifty years ago when circumstances were completely different?
Oh, I actually agree that the system isn't doing what it supposed to and that we should exit it here. I just don't think it will have that much effect on most consumers, because the volume is comparatively tiny. That's all I'm saying.
I'm having trouble imagining what positive result could come out of this that outweighs the downside of fracturing the global postal system.