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Chinese Manufacturers in Crosshairs of New Bill

New legislation was introduced on Tuesday that could hinder Chinese manufacturers’ ability to compete in marketplaces in the United States. Senator Bill Cassidy, a Republican from Louisiana, proposed the Ending Needless Delivery Subsidies (ENDS) Act, which would force the U.S. Secretary of State to negotiate the end to all foreign subsidies of international postal shipments by Jan. 1, 2021, CNBC reported.

The U.N.’s Universal Postal Union (UPU) currently determines how much each of its member countries pays for the delivery of international mail. Although the system has been established for wealthier countries to pay more than poorer countries, the UPU has made it easier for foreign manufacturers, particularly those in China, to cheaply get products into U.S. online marketplaces like Amazon.

“The current system costs American jobs at the expense of American taxpayers,” Cassidy told CNBC. “American taxpayers should not be subsidizing Chinese companies mailing items to the U.S., competing with our businesses.”

In 2015, a Congressional subcommittee held a hearing to discuss the market distortions caused by the varying fees. Amazon even supported the reforms, telling Congress that “the clear losers are American businesses selling to American consumers.”

Although Amazon wasn’t specifically mentioned in the ENDS Act, Cassidy’s proposal comes on the heels of President Donald Trump accusing the e-commerce juggernaut of not paying enough taxes, destroying small businesses and abusing its relationship with the U.S. Postal Service.

Amazon Chief Executive Jeff Bezos has yet to respond to the accusations. Also in Trump’s crosshairs of late is China, with the president imposing tariffs on up to $60 billion worth of Chinese goods as part of an investigation into the theft of U.S. intellectual property. Beijing responded last week by announcing tariffs of its own on 106 U.S. products. The 25% levies would amount to roughly $50 billion of American goods annually, according to China’s Ministry of Commerce.

China’s move intensified concerns of a trade war between the world’s biggest economies, which could have consequences for the promotional products industry, since tariffs on imported Chinese goods could potentially raise the price of promo items sold in North America. Promotional products execs have been, for the most part, taking a wait-and-see approach to the issue.