Set up in 1874, it created the rules for global mail exchanges, including setting the fees that postal services can charge for delivering shipments from foreign carriers.
Amazon's prices illustrate the gap: standard shipping for an iPhone case from China to a NY address is $4.99, while from a seller based in the USA is $5.99.
Under the current UPU system, a one-pound package shipped by a US business costs between $10 to $13.
White House officials said the United States would start the process of getting out of the Universal Postal Union, a Switzerland-based United Nations organization that connects postal services worldwide.
A letter carrier prepares mail for delivery at the United States Postal Service (USPS) Joseph Curseen Jr. and Thomas Morris Jr. processing and distribution center in Washington, D.C., US. He attacked what "we consider to be nearly predatory, in some cases certainly predatory, economic behaviour" that was encouraging small countries to build up "massive debt" that they would have "difficulty repaying".
'China has always defended and supported multilateralism and the work done by the Universal Postal Union.
The move was welcomed by the U.S. National Association of Manufacturers, which called the existing postal pact "outdated" in the age of e-commerce and at a time of Chinese manufacturing dominance.
If it happens, it would benefit USA merchants and shippers, including Amazon.com, who say they are undercut by foreign postal services' access to low rates.More news: Mourinho plays down touchline melee after 'awful' Chelsea draw
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The Postal Service applauded the action Wednesday.
We urge all governments to engage constructively in the months ahead to agree on reforms to the relevant UPU instruments to provide a level playing-field for all businesses and enhance the security and integrity of the global postal delivery system.
But the USA says the discounts put American businesses at a disadvantage.
However, this step to withdraw from the postal union might have a positive impact on the fight against Chinese counterfeits. Beginning under Obama's "pivot to Asia" and accelerated under Trump, the United States has sought to isolate and encircle China by strengthening ties and alliances throughout the Indo-Pacific especially with Japan, Australia and India.
"People are getting hurt in this country by an unfair system", the official said.
"If negotiations are successful, the Administration is prepared to rescind the notice of withdrawal and remain in the UPU", said the White House.
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. The BBC reports the withdraw of this treaty will increase shipping costs from China by between 40% and 70%. But Navarro and Trump dismissed those changes as insufficient to deal with the explosion of online free-shipping offers for goods from China.
The president's memorandum requested that the UPU establish terminal dues rates that fully reimburse the U.S. Postal Service for costs to the same extent as domestic rates for comparable services.