Of course you realize that this change will likely disproportionately affect the poor and middle-class (who will see a sharp rise in shipping costs) as well as smaller businesses who rely on thin margins to survive.
The cost of $300 million per year as quoted in the article seems like peanuts compared to some of the other actions this administration has burdened tax payers with.
Generally speaking, continuing to kick the crutches out from under the lower classes is a bad idea especially when there are no better solutions being implemented.
You need to keep in mind that the postal treaty wasn't JUST for China either, almost every single nation was part of the postal treaty. Withdrawing from this treaty would likely result in increased postage for all international shipments.
Luckily there is a very easy way for people to avoid paying for shipping... although maybe things have changed since I was young. Shop at local stores if shipping costs make buying by mail too expensive. Like it was forever prior to Amazon.
Prior to 2005 it was consistently less expensive to shop at the local CVS, book store, or radio shack than to order online.
If my business model requires public subsidies for shipping my goods to turn a profit, my business model is garbage since 100% of my profits are literally taxpayer funded. Maybe small quantity mail order batteries from China isn't actually a reasonable thing to have and it maybe actually costs less to buy batteries in giant crates and have them available in local stores.
I might even say that this is obviously the case (for the battery example). Plus you build the local economy rather than subsidizing it's obliteration.
As a person who ran a local store 'back when', the cost of shipping was factored into the wholesale price which then was used by the store to calculate the retail price. The end result was that shipping was included in the mark up percentage, typically 60 to 100%.
If a middle man was used, like an importer/warehouser, that middle man added their markup on shipping as well, typically 20 to 40%.
The only thing I do want to bring up about shopping locally, for electronic components specifically, is that stores like Radioshack are essentially extinct, at least where I am in the Midwest. There are no local electronic stores of any variation except for Best Buy.
Which is precisely why I do not shop at corporate mega stores that make it impossible for smaller businesses to compete using shady practices to lower prices.
Once Amazon or Wal-Mart are the only company left, they will be free to raise the prices to whatever they want.
I doubt it. Chinese companies aren’t sending wholesale stock vis epacket. Losing consumer ability to by tiny quantities of fake LEGO or whatever in quantity 1 volume isn’t putting anyone out of business.
I would rather subsidize domestic shipping to lower barriers to e-commerce entrants if we feel a burning desire to subsidize something in this area.
Most actions disproportionately affect the poor and middle class--that doesn't mean we shouldn't take them. Although it doesn't always work out in practice, ideally, other wealth redistribution policies should blunt the impact of said actions. That said, $300m is not very much, so it seems largely like a symbolic gesture.
This change will likely disproportionately affect the poor and middle-class (who will see a sharp rise in manufacturing jobs) as well as smaller businesses who rely on manufacturing to survive.
Given the state of the economy, "burdened" is not a reasonable description.
Manufacturing jobs are a thing of the past, even China is automating more every day. When "the jobs come back", it won't be to employ the poor and middle-class but to set up automated production. Which, this time around, will be more competitive than low waged Chinese workers.
It isn't time to give up on the USA. The USA got an extra 378000 manufacturing jobs in the past year and a half. That is jobs, not just automated production.
Even if you have a source for this data, how many of these jobs are going to be lost to automation and process improvements in the next 5-10 years? My father recently retired form a steel mill. He wasn't replaced. My city's entire economy used to be based around steel manufacturing. There's still plants here, but the number of people who work in the steel industry has steadily declined. Here is a cited source to say it's down 42% since 1990 [0]. In addition to the steel industry, I work in the financial sector. It used to take a room full of accountants to file with the SEC. Now it takes one or two to input the data and check for errors in the software. Process enhancements and technology are going to eat people's lunch and manufacturing is one of the easiest areas to automate and streamline.
How recent? Steel is doing very well right now. They are hiring. Your source even shows this, not that your source is at all trustworthy.
1990 is a long time ago.
Steel is far from the only kind of manufacturing. Even if steel mill jobs all disappeared, overall manufacturing could be doing well. I'm not even 100% sure that steel should be lumped in with manufacturing; it's kind of like the final step of mining.
Process enhancements and technology face declining benefits. At some point, you've automated everything that makes sense to automate.
The jobs are going to stick around for 10 years unless we go back to a policy of purposely regulating American industry out of existence.
OP was arguing that manufacturing jobs are coming back. I cited a couple examples showing automation is going to make this very hard to be sustainable. I am not arguing that this is a bad thing or that people won't find productive ways to spend their time. I am arguing that bringing manufacturing back is not a long term sustainable plan.
Manufacturing continues and will forever...not "a thing of the past." This subsidy was a small part of the larger policy landscape that caused you to think manufacturing was a thing of the past. We have makers everywhere!!
The sheer volume China, and other Asian countries, are producing in the electric industry pales any impact this treaty could have. I seems to me that this treaty gained significance due to e-commerce. Thus it impacts consumer orders, not industrial ones. So the only parties to be impacted are online retailers (and every private sender).
Not sure how that would impact the current global work-share in any measurable way...
>will likely disproportionately affect the poor and middle-class
...in China, while improving emloyment in manufacturing in USA.
Currently you have an imbalance in America's economy, where the poor and middle-class get goods from China, and the poor and middle-class in manufacturing[1] in China get the monetary reward.
Used to be that, due to local manufacturing of the goods, the same poor-and-middle-class americans would be earning back the money spent on the goods[1] by their neighbors, in effect exchanging with each other (and with local capitalists). However due to the current trade costs imbalance, a lot of the money flows out of american's pockets, but not back to them.
Will there be a price increase right around the change? Sure. But it will make local manufacturing more cost-effective, in effect spurring local employment in both production and related services, and thus looping the money expended on the goods[1] back in to the neighbor's pockets.
It's a win-win for the voters in USA.
[1] and related services, like engineering, transportation, worker catering & care, etc.
The treaty is covering parcels up to 2 kg if I read the article correctly. Industrial scale shipments are in the order of 13 tons upwards to get full container loads. These rates are admittedly dirt cheap. But this is due to over-capacities and not some parcel shipments. I would assume certain online retailers stand to profit for that discision regarding customer order from China.
This has been a big part of the motivational story all along, but what would we sell to the Chinese, and how does that compare to what they sell to us (with or without unfairly subsidized shipping)?
