Postal subsidies leave U.S. ‘flooded’ with Chinese knockoffs even as tariffs drive up price of legitimate products

Morgan Harris, owner of Green Bambino, a baby products store in Oklahoma City, says she strongly opposes the new tariffs on consumer products from China imposed by the Trump administration in the past year. But she says there is one issue where she does agree with President Trump — elimination of postal subsidies that allow online Chinese retailers to sell products directly to her customers more cheaply than she can, even though they have to be shipped halfway around the world.

“The United States is being flooded with cheap Chinese imports,” Harris said. “Parents can go on Alibaba and buy cloth diapers for $5 each instead of the $20 they might pay for a diaper made in the United States. People might not care so much about cloth diapers, but we’re seeing counterfeits, knockoffs and intellectual property violations on everything.”

Being able to voice opposition to tariffs and support for ending postal subsidies was part of why Harris was glad to welcome Representative Kendra Horn, D-Okla., for a visit to her store this week. The first-term congresswoman toured Green Bambino on Monday, along with Oklahoma Retail Merchants Association CEO Kiley Raper, who helped NRF arrange the visit.

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Green Bambino began nine years ago by selling cloth diapers and natural baby goods but has become the main baby store in Oklahoma City, selling a full range of products from pacifiers to strollers and toys. In addition to Harris, the single-store operation has two full-time employees and three part-timers.

Harris said elimination of subsidies provided as part of U.S. membership in the Switzerland-based Universal Postal Union is a “huge priority for my industry” and that she supported Trump’s announcement last October that the United States would withdraw from the organization. Withdrawal is a year-long process, however, and the State Department is negotiating for better rates for U.S. shippers, so the subsidies remain in place in the meantime.

Under a provision granted in 1969 to encourage growth in poor countries that remains in effect despite China’s emergence in the world economy since then, China receives shipping discounts of up to 70 percent. That means a one-pound package can be shipped from China to the United States for about $2.50, and smaller packages cost less, according to White House figures.

Harris said the cheap shipping means Chinese competitors can undercut her prices, especially when it is combined with widespread counterfeiting of name-brand products — sometimes to the point of presenting safety hazards.

“We’re seeing images and prints from brands we sell, and they (Chinese sellers) are selling inferior versions of these products,” Harris said. “They’re not going through the testing to make sure the products are lead-free or that they’re not going to tear apart and drop the baby. Some of the car seats coming in direct from China, in particular, are completely unsafe.”

And when parents receive a product and realize it is defective or a counterfeit, they cannot return it because of the high cost of shipping it back to China, she said.

While subsidized shipping is making it easier to send cheap Chinese knockoffs to the United States, tariffs are making legitimate name-brand products manufactured in China more expensive for retailers like Harris and, in turn, her customers. A Halo DreamNest — a baby “play yard” similar to the classic Graco Pack ‘n Play — now sells for about $15-20 more because of tariffs, for example. While she makes an effort to source products from the United States, Canada or Europe, about half the products she sells are made in China, so that’s just one of many that now cost more.

“I don’t see tariffs as the way to balance trade between China and the United States,” Harris said. “It’s not like China is paying for this. I pay for this and my customers pay for this.”

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