Shipping is also subsidized by all of us on this end. International postage agreements were never intended to cover a massive unidirectional deluge of low-value packages. The costs of all the additional logistics are ultimately externalized to the taxpayer, and China totally exploits this. It’s exactly the reason the EU set a tariff for low-value parcels in particular.
replyIt's not hardly an exploit when the taxpayer is the one benefiting
replyThis amounts to a subsidy of Chinese manufacturing over local manufacturing.
replyI can’t see how a market distortion is a net benefit to the importing country.
It seems self-destructive.
If everyone bought from Temu then the net benefit would be zero relative to just including it in the price right?
replyIn practice the value flows from people who don't buy cheap crap from China to people who do.
One might even refer to it as a "public service".
replyIt’s a classic negative externality. Not every taxpayer partakes in this pathological consumerism.
replyImagine how dysfunctional society would be if we each individually got back precisely the value to capital we put in.
replySubsidizing giant Chinese webshops over local vendors and supporting unsustainable consumption of single-use plastic garbage is not exactly the sort of public service that governments are supposed to provide.
replyAnd that's exactly how we use USPS to subsidize amazon. Or did for a long time, anyway.
replyTo be clear, this is the smart thing to do—package delivery SHOULD be subsidized. Amazon should pay into this disproportionately through taxes, though.
I think the parent comment is incorrect, however this is true for some products. Solar panels being the one I know for a fact, because we buy them at work. We pay less than it costs them to manufacture them because the Chinese government subsidizes it. (Granted, after tariffs we're probably hitting that manufacture price again, but that money doesn't go to them obviously.)
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