U.S. shies away from calling China a currency manipulator

A truck transports a container next to stacked containers at a port in Qingdao in China's eastern Shandong province

AFP 2018 STRChina Faces'Alarming Local Government Debt Amid Mounting Trade War With US

"If negotiations are successful, the administration is prepared to rescind the notice of withdrawal and remain in the UPU", White House spokeswoman Sarah Sanders said in a statement.

The administration officials also said that the treaty is causing the US Postal Service to lose $300 million (€260 million) a year and said people smuggling the narcotic fentanyl use the treaty to cheaply ship the drug from China to the US.

The White House has said it will notify the union on Wednesday that it is beginning the year-long withdrawal process, though senior officials said their end goal is not to withdraw, but rather to renegotiate fairer rates.

The New York Times reported today that President Trump plans to withdraw from the UPU (Universal Postal Union) treaty.

President Trump said he did not think China was ready to restart trade discussions.

In rewriting the North American trade pact this year, Washington, Ottawa and Mexico City agreed any member could withdraw from the new treaty if any other member moved to enter a trade agreement with a "non-market" economy, a thinly veiled reference to China.

The pact has always been a source of frustration for presidents of both parties and prompted complaints from small businesses, big retailers like Amazon and shipping giants like UPS. Trump has announced US withdrawal from the Paris agreement to mitigate climate change and an worldwide deal with Iran to curb Tehran's nuclear program.

A 2015 report from the Inspector General of the U.S. Postal Service found that the treaty, which was created to ease the flow of mail and small parcels between 192 countries, had not been overhauled to reflect the new realities of e-commerce and China's aggressive undercutting of worldwide competitors.

USA officials say the growth of transactions on the internet is facilitating a high level of counterfeit goods shipped to the US, as well as narcotics and fentanyl, with the aid of the lower shipping costs.

The losses to retailers and manufacturers could be much more, as online commerce expands further. These include allegations of hacking into US companies' computers to steal trade secrets and forcing American firms to hand over technology to China in exchange for access to the Chinese market.

"This outdated arrangement contributes significantly to the flood of counterfeit goods and unsafe drugs that enter the country from China", said Jay Timmons, chief executive of the National Association of Manufacturers, a trade group. The fact is, through the bilateral trade agreement with the United States, you know how much benefit American consumers have got with trade with China over the years and how much money American companies have made from operating in China.

"Something has to be done", he said.

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