Technology

What to know about Trump’s escalating fight with Amazon

(Source: www.theverge.com)

The president’s feud with Amazon reached a new level of tension this week, as Trump ordered a review of the US Postal Service’s finances. But the attacks seem likely to escalate from here. Here’s a short catch-up on the fight.

Trump’s tweets

Trump has never been quiet about his distaste for Amazon. His tweets about the company stretch back years. In December 2017, he was tweeting that Amazon was making the Postal Service “dumber and poorer.”

Why is the United States Post Office, which is losing many billions of dollars a year, while charging Amazon and others so little to deliver their packages, making Amazon richer and the Post Office dumber and poorer? Should be charging MUCH MORE!

— Donald J. Trump (@realDonaldTrump) December 29, 2017

But the frequency of attacks seemed to increase recently on Twitter after an Axios report said Trump was “obsessed” with the company. Shortly after the report was published, Trump took aim at the company again, accusing it of paying too little in taxes, using the Postal Service as a “delivery boy,” and costing the country money.

I have stated my concerns with Amazon long before the Election. Unlike others, they pay little or no taxes to state & local governments, use our Postal System as their Delivery Boy (causing tremendous loss to the U.S.), and are putting many thousands of retailers out of business!

— Donald J. Trump (@realDonaldTrump) March 29, 2018

Over the following days, he fired off similar complaints about an alleged “scam,” and attempted to link the e-commerce giant to the Jeff Bezos-owned Washington Post.

While we are on the subject, it is reported that the U.S. Post Office will lose $1.50 on average for each package it delivers for Amazon. That amounts to Billions of Dollars. The Failing N.Y. Times reports that “the size of the company’s lobbying staff has ballooned,” and that…

— Donald J. Trump (@realDonaldTrump) March 31, 2018

…does not include the Fake Washington Post, which is used as a “lobbyist” and should so REGISTER. If the P.O. “increased its parcel rates, Amazon’s shipping costs would rise by $2.6 Billion.” This Post Office scam must stop. Amazon must pay real costs (and taxes) now!

— Donald J. Trump (@realDonaldTrump) March 31, 2018

I am right about Amazon costing the United States Post Office massive amounts of money for being their Delivery Boy. Amazon should pay these costs (plus) and not have them bourne by the American Taxpayer. Many billions of dollars. P.O. leaders don’t have a clue (or do they?)!

— Donald J. Trump (@realDonaldTrump) April 3, 2018

Amazon and the Postal Service

It’s true the Postal Service has serious financial hurdles, as Americans are sending less paper mail, even as increases in package delivery — where Amazon contributes — offset some of those losses.

Some of Trump’s contentions about the company are partly true, if largely misleading. Amazon has faced complaints for years about how it collects state and local taxes. After long-running dispute sover how online sales should be taxed, Amazon started collecting sales tax last year in every state with a law on the books. (Cities, meanwhile, have complained about being left out.) In most states, however, the company still doesn’t collect taxes on behalf of sellers on its third-party marketplace platform. The tiered collection system has become another point of dispute.

Trump’s main complaint, though, is that the Postal Service is giving Amazon too good of a deal on delivery. There is, arguably, a fair point buried in the idea. The Postal Service enters into deals with major customers, and while we don’t know the details of Amazon’s rates, some analysts have suggested companies could be charged more. When Trump writes that the Postal Service “will lose” $1.50 per package, he seems to be referring to an analyst report and Wall Street Journal opinion article (from an author with ties to FedEx) that suggested the USPS package business was operating below the “true” cost of some expenses. (When Trump cited the analyst report, the author explained that the report said the packages were being sent below those costs generally, not because of Amazon’s deals specifically, and that the figure was actually $1.46.)

The Postal Service has called that picture of its package business, a bright spot in its finances, “inaccurate.” The Postal Service is required by law to charge at least a break-even rate on its package deliveries.

The escalation

Trump has argued without evidence that The Washington Post is engaged in attacks on him on behalf of Bezos, who once offered to launch Trump into space on a rocket. Trump’s feud with Amazon is often seen as a proxy war on Bezos and the Post. Earlier this month, Vanity Fair reported that Trump, shrugging off advisers, was considering several ways he can go after the company, from encouraging state-level investigations to canceling a major government cloud computing contract.

Instead, Trump apparently chose to issue Thursday’s executive order. The direction does not mention Amazon by name, but it seems likely the decision was driven by the company. The order creates a task force “to evaluate the operations and finances of the USPS.” The task force has 120 days to provide findings and recommendations.

What that might mean for Amazon will only become clear later, and it will also take some time to see whether Trump pushes further to reevaluate the government’s links the company.

More Info: www.theverge.com

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