Trump Proposes Moving USPS Under Commerce Department

On Friday, President Donald Trump suggested he may bring the U.S. Postal Service (USPS) under the Commerce Department, marking a potential executive branch takeover of the agency, which has operated independently since 1970.

“We want to have a post office that works well and doesn’t lose massive amounts of money. We’re thinking about doing that. And it’ll be a form of a merger, but it’ll remain the Postal Service, and I think it’ll operate a lot better.”
— Donald Trump

Trump made these comments at the swearing-in ceremony of Commerce Secretary Howard Lutnick, framing the move as a way to end financial losses at the $78 billion-a-year agency.

“He’s got a great business instinct, which is what we need, and we’re looking at it. We think we can turn it around. It’s been a tremendous loser for this country.”

Trump has long criticized the USPS and previously floated ideas about privatization. Below are key details on the history, structure, and funding of the USPS—and what Trump’s proposal could mean.

1. The History of the USPS

• Established in 1775 during the Second Continental Congress, with Benjamin Franklin as the first Postmaster General.
• In 1872, Congress made it an executive branch department.
• The 1970 Postal Reorganization Act (signed by President Richard Nixon) transformed it into an independent, self-financing agency after an eight-day strike over wages and benefits.
• Since then, the USPS has faced periodic financial struggles, resisting calls from Trump and others to privatize the service.

2. Who Works for the USPS?

• The USPS employs about 640,000 workers across the country, handling mail, medicine, election ballots, and packages from urban centers to rural towns and even remote islands.
• The 1970 reorganization granted workers pay raises and collective bargaining rights, helping many Black and minority workers enter the middle class.
• During the COVID-19 pandemic, postal workers remained on duty. More than 200 employees died from the virus, according to the American Postal Workers Union.

3. Who Runs the USPS?

Postmaster General Louis DeJoy

• Appointed in 2020 during Trump’s first term.
• A Republican donor and former logistics business owner.
• Faced criticism for:
  • Mail slowdowns
  • Election mail concerns
  • Service and cost-cutting measures
• Announced a 10-year turnaround plan in 2023 but recently stated he will step down, asking the Postal Service Board of Governors to begin the search for his successor.

4. Who Controls the U.S. Postal Board?

• The USPS Board of Governors consists of up to nine members, appointed by the President and confirmed by the Senate.
• No more than five members can belong to the same political party.
• Current leadership:
  • Chair: Amber F. McReynolds (Former election official, appointed by Biden)
  • Vice Chair: Derek Kan (Former Trump administration official)
• Current Board Makeup:
  • 4 appointed by Biden
  • 2 appointed by Trump
  • 3 vacancies (due to Senate failing to vote on Biden’s nominees)
• The Board has the power to hire and fire the Postmaster General.

5. How is the USPS Funded?

• Since 1970, the USPS has been largely self-funded, with revenue coming from customer fees.
• Congress provides a small annual subsidy—$50 million in 2023—to support discounted and free mail services.
• Financial Struggles:
  • Decline of profitable first-class mail
  • Cost of retiree benefits
  • Accumulated $87 billion in losses from 2007 to 2020
• In response, DeJoy announced a 10-year plan including:
  • Modernizing operations
  • Increasing postage rates
  • Cutting costs

Some lawmakers have criticized the plan, arguing that service slowdowns and consolidations could harm rural communities.

6. Trump’s Long-Standing Criticism of the USPS

• 2020: Threatened to block USPS from COVID-19 relief funds unless it quadrupled package rates for major customers like Amazon.
  • Amazon’s founder, Jeff Bezos, also owns The Washington Post, a frequent critic of Trump.
• December 2023: Floated the idea of privatizing USPS, citing competition from Amazon, UPS, and FedEx.
• February 2024: Expressed renewed interest in merging the USPS with the Commerce Department.

“It’s an idea a lot of people have had for a long time. We’re looking at it.”

What Could Happen Next?

If Trump’s proposal moves forward, potential outcomes could include:
Increased federal oversight under the Commerce Department
Changes in leadership at USPS
Privatization efforts gaining momentum
Pushback from Congress and labor unions
Legal challenges over executive power

The future of the U.S. Postal Service remains uncertain, but Trump’s renewed interest in restructuring or privatizing it ensures the issue will stay in the spotlight.

Conclusion

With Trump considering taking control of the USPS, the agency faces a potential shake-up that could impact its operations, funding, and future leadership. Whether the move improves efficiency or sparks political and legal battles remains to be seen.

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Unclear Suspension, Possible Tariff-Related Issues

While the USPS did not initially provide a reason for the temporary suspension, its Wednesday statement suggested the decision was linked to the new US tariffs imposed on Chinese imports and the elimination of the de minimis exemption.

Previously, this exemption allowed packages valued at less than $800 to enter the US without duties or inspections. With its removal, customs officials now face the massive challenge of inspecting incoming parcels to collect new import taxes.

“The USPS and Customs and Border Protection (CBP) are working closely together to implement an efficient collection mechanism for the new China tariffs to ensure the least disruption to package delivery,” the USPS said in its statement.

Impact on E-Commerce Giants

The brief suspension threatened major e-commerce companies like Shein and Temu, whose business models depend on the de minimis exemption to ship low-cost goods directly to US consumers. The relaxed regulations had previously allowed over a billion packages to flood the US annually, offering budget-conscious shoppers affordable clothing, electronics, and household items.

Chelsey Tam, a senior equity analyst at Morningstar, highlighted the logistical challenges USPS now faces:

“There were 4 million de minimis packages per day in 2024. Checking all those packages for taxes will take time.”

China Retaliates with Economic Measures

China responded swiftly to the new US tariffs with a set of countermeasures announced Tuesday, including:

• 15% tax on certain types of coal and liquefied natural gas
• 10% tariff on crude oil, agricultural machinery, large cars, and pickup trucks
• New export controls on more than two dozen metal products and related technologies
• Blacklisting of US firms like biotech company Illumina and fashion retailer PVH Group

These measures will take effect on February 10.

China Calls US Actions ‘Unreasonable Suppression’

During a Wednesday press briefing, China’s Foreign Ministry urged the US to stop politicizing trade issues.

“Washington must cease its unreasonable suppression of Chinese companies,” said spokesman Lin Jian, adding that China will take necessary steps to defend its businesses.

Trade Tensions Escalate

As trade tensions rise, former President Donald Trump—who initiated these tariffs—stated on Tuesday that he was in “no rush” to speak with Chinese President Xi Jinping, despite previously suggesting a conversation might happen within 24 hours.

Experts warn that requiring inspections for every package could significantly slow down international deliveries. While CBP has the authority to inspect all international parcels, in practice, not every item is opened. CNN has reached out to CBP for further comment.

This story has been updated with additional information and context.

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