![Go[ing] Postal](https://substackcdn.com/image/fetch/$s_!lRzt!,w_80,h_80,c_fill,f_webp,q_auto:good,fl_progressive:steep,g_auto/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F9e03b0b6-2100-4e6e-b2d7-7c6c009ef6c4_1280x1280.png)
The great postal boycott has begun. On August 25, NBC News’ Steve Kopack and Brian Cheung reported, “Postal services in Japan and Switzerland are the latest to pause shipments to the United States this week, days before an exemption for certain import taxes is about to expire.” As of August 26, more than 20 nations—including France, Germany, and the U.K.—have announced the suspension of at least some shipments into the U.S. And once tariff exemptions on goods shipped to the U.S. worth $800 or less end on August 29, the number of countries on this list will surely proliferate.
These changes not only highlight the (many) unintended consequences of trade wars but also underscore the failure of international postal rules and norms. For the sake of billions of consumers and trillions of dollars of economic activity, the postal services of the world must push the envelope on cooperation.
The growing postal boycott of the U.S. is the latest proof that eliminating the de minimis tariff exemption on goods valued $800 or less is a shortsighted policy. As Taxpayers Protection Alliance Chief Regulatory Analyst Juan M. Londoño noted in a recent piece for The Baltimore Sun, “Under the executive order [ending the de minimis exemption], international suppliers will have two options: either pay the tariffs as a percentage of the package value or pay a simplified flat fee that starts at $80 and can go as high as $200 per package, depending on the effective tariff rate of the country of origin. Suddenly, [a] $17 bag of Colombian coffee could cost you a whopping $97. Justifiably, you go back to the lesser-quality option that you could find at the grocery store, which will also likely be higher in price (and probably not from the U.S.).”
As the recent postal news demonstrates, this harsh immediate impact on U.S. consumers is just the start of the problems. When consumers cannot get their products from foreign posts, they are suddenly faced with far fewer options at a significantly higher price. And if they need a product from one of the many countries boycotting the U.S., they may need to ship the product in a convoluted and costly way.
One key player in this growing international crisis has been conspicuously quiet: the Universal Postal Union (UPU).
When mail originates in one country and is sent to another country, different countries’ postal agencies must agree on who pays what. Under the “terminal dues” system established by the UPU, the postal agency of the country where the mail comes from must compensate the destination country’s postal service for delivering mail to the recipient. As the U.S. Postal Service notes, “each postal administration that receives mail from another administration has the right to collect payment from the originating post to compensate for costs incurred to deliver that mail.” The UPU is also supposed to be a forum in which postal services can iron out their differences on pressing matters such as tariffs.
Unfortunately, the UPU has neglected its role as a forum and doubled down on unfair and confusing terminal dues. In 1999, the UPU opted to create a “terminal dues” system based on participating countries’ wealth rather than underlying delivery costs. Nations deemed to be in economic “transition” such as China would not have to pay wealthy “target” countries such as the U.S. full delivery costs. As a result, the USPS—and American taxpayers and consumers—footed the bill when China was allowed to underpay for mail inbound to the U.S. One 2015 Inspector General (IG) report estimated that this China-first system cost the USPS about $75 million per year. And, because the USPS had to fork over a fortune to China Post to deliver American packages to Chinese destinations, it was far cheaper for China to export products than for Americans to sell to Chinese consumers. As Linn’s Stamp News noted, “shipping a 1-pound parcel to New York City from Greenville, S.C., would cost almost $6 via the United States Postal Service, but only $3.66 from Beijing to New York.”
This changed during the first Trump administration, when President Trump threatened to withdraw from the UPU unless the bureaucracy leveled the playing field for American businesses and the USPS. In response, the UPU called an “Extraordinary Congress” in 2019 to discuss possible changes. The result was a win for American taxpayers and consumers. In exchange for the U.S. staying in the UPU and handing the organization $40 million over five years, the UPU agreed to let member-countries self-declare their own international postage rates. Americans would no longer be doomed to subsidize Chinese shipments and could demand renumerations reflecting actual delivery costs.
The results have been largely positive so far. A 2024 analysis by the Government Accountability Office found that, for the first time in a long time, USPS’ international mail revenue is covering inbound delivery costs.
But there are signs of trouble brewing. The UPU is still trying hard to “reduce inequalities” and tackle poverty, unusual goals for a global postal organization. The only real lever the UPU has to address these issues is using the “terminal dues” system to subsidize supposedly poor nations. That tinkering not only fuels the grievances that have led to the current tariff debacle but also undermines the UPU’s status as a forum of disputes.
The UPU should step up during this crisis and get all the postal services in the room to work out growing trade disputes. The postal powers-that-be should be striving to find agreement, not fueling tariff tantrums.