I think it's because they are buying space that otherwise would be empty, and maintain an elastic buffer of packages to fill those spaces as they become available - the outgoing mail containers on planes are likely booked and paid for months in advance so the people paying for them will happily take 20% of their normal rate to fill the rest of them at the last minute

No, that's not the problem.

Here is the problem. I make a widget. It costs me $10 US to manufacture. I go to the post office, and ship it to an address directly across the street. They charge $7.

I go on AliExpress. I buy a similar widget, and ship it to the same address. The total cost, the item plus shipping, is $6.

Let's break that down. Their cost of manufacturing is lower. Let's say it's free. Ok fine. Trans Pacific shipping is cheap. Let's say it's free. Ok fine. They still have to ship it via the post office from the port in Long Beach to the post office in New Jersey; again, let's say that's free. The post office then has to deliver out across the street.

The post office charges me $7 to walk it it across the street. Why should the Chinese shipper only pay $6 for the same service?

That, and air freight only costs around $5/kg at regular rates.

The low-rate consolidators are kinda shameful by only bringing goods to the closest port to the origin, not the destination.

E.g. in Canada, they only bring it to the Vancouver port, while wealthier countries will pre-sort and air it to the closest intl mail port (Toronto, Montreal or Vancouver).

this is a trade off between cost and speed of delivery - shipping out of China I have the choice of many different carriers - for example I can use cheap (and slowish) China Post, or faster and $6 more PostNL who will also give me tracking - I give my customers the cheap China Post for free and charge $6 for PostNL

(in the near future if US mail prices go up I may be forced to charge US customers more, I may also have to raise prices to US customers if I find that Trump's sanctions start to apply to small packages and I'm stuck paying from my end)

Nope, the prices were dictated by the UPU, a global treaty organization that the US is part of.

I think you're confusing "terminal dues" (which is what countries charge each other for delivering a package in the destination country) and the actual cost of shipping between countries (which is what I'm talking about here)

Since you are responding to someone comparing US domestic (in town) shipping prices to international shipping price, I don't see how you are not talking about "terminal dues".

International freight costs could explain why international shipping is more expensive than domestic shipping, but even if international freight prices are 0, they can't explain why domestic shipping is more expensive than international shipping.