Published: Mon, April 02, 2018
Money | By Wilma Wheeler

Trump blasts Amazon for hurting the postal service. Is that true?

Trump blasts Amazon for hurting the postal service. Is that true?

President Trump lashed out at Amazon on Twitter a day after an Axios report said he planned to "go after" the retail giant.

"I have stated my concerns with Amazon long before the Election". The president would love to clip CEO Jeff Bezos wings.

The president's jab comes as the solicitor general, who represents the federal government before the U.S. Supreme Court, is siding with South Dakota's attempt to overturn the high court's 1992 decision barring states from taxing out-of-state sellers who lack an in-state physical presence.

He has also accused Bezos of using the Washington Post, which Bezos owns separately from his interests in Amazon, as a tool to build political influence and damage him personally.

"Amazon doesn't collect sales taxes on goods sold by third-party affiliates, unless it is contracted to do so by those sellers", the official said. One, by not universally collecting sales tax, Amazon and other e-retailers are maintaining an unfair advantage over traditional retailers, according to ITEP. There have been efforts in Congress to force all e-commerce companies to collect state sales tax, but Amazon already does that.

Brick-and-mortar stores have closed by the hundreds, as retail chains struggle to compete with the convenience of online shopping, a transformation led and dominated by Amazon. "Towns, cities and states throughout the USA are being hurt - many jobs being lost!"

In other words, the discounts a company like Amazon receives from USPS can't exceed the money the postal service saves when that company helps out with some of the logistical work required to ship packages.

But despite Amazon's seemingly inexorable growth - including its buildup in groceries, entertainment and health care - there's very little the president or the federal government could do under current antitrust practices.

It's unclear what that obsession might translate to should Trump try to aim the powers of the executive branch at the company.

Trump's attacks on Amazon reflect a broader debate about its effect on the USA economy. Inc. has reportedly cut ties with Washington lobbying firms Akin Gump Strauss Hauer & Feld LLP and Squire Patton Boggs. Partly because of the large volume of packages it sends, Amazon gets discounted shipping rates from the post office.

The USPS reported a decrease of $1.8 billion in revenue in 2017 compared to the previous year, a drop driven largely by a decline in regular mail, like letters and postcards.

"With Facebook and regulatory worries, the last thing nervous tech investors wanted to see was news that Trump is targeting Bezos and Amazon over the coming months as this remains a lingering cloud over the stock and heightens the risk profile in the eyes of the Street", GBH Insights analyst Daniel Ives said.

The Postal Service declined to comment on Trump's tweet.

Though it's unclear how much of a boon, if any, Amazon has turned out to be, the postal service is better off today than it was before. Cloudtail reported revenues of nearly Rs 5,900 crore for the financial year ending March 2017.

Given that they follow the same model one would think Donald Trump would have more respect for Amazon but he's clearly not a fan.

Amazon could hurt the postal service - and other package companies - if it successfully shifts more of its delivery to its own delivery network, which it's been slowly building out over the past few years.

There has been talk in Washington of taxing online commerce more.

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