Donald Trump keeps attacking Amazon — here’s why, and what he’s hoping to accomplish
The leader has been insisting that the United States Postal Service is losing “massive amounts” of money in its dealings with Amazon. On Tuesday, Trump tweeted that the post office may not “have a clue” about how much the company is hurting it.
“Amazon should pay these costs (plus) and not have them bourne (sic) by the American Taxpayer. Many billions of dollars. P.O. leaders don’t have a clue (or do they?)!” he wrote.
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The president has tweeted similar calls for Amazon to pay more taxes in the past. Last week, he called the company’s deal with the post office a “scam.”
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Here’s a look at Trump’s complicated history with Amazon, and what he could be hoping to accomplish with his latest round of criticism.
What’s really hurting the U.S. Postal Service?
Trump is correct that the U.S. Postal Service is losing money, but that isn’t related to Amazon — or package delivery in general.
The president insists that its reason for losing money is that Amazon does not pay enough taxes, and that puts the burden on taxpayers who fund the service.
On the contrary, the postal service has enjoyed double-digit increases in revenue from delivering packages, but that hasn’t been enough to offset declines in first-class letters and marketing mail, which together make up more than two-thirds of postal revenue.
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The service’s 11 years of losses are mostly attributed to pension and health-care costs.
As Bloomberg reports, Trump has not offered any evidence about why he believes Amazon is to blame for the post office’s woes. The post office itself has said that e-commerce deliveries help boost its operations.
Jeff Bezos and The Washington Post connection
Many have suggested that Trump’s disapproval of Amazon stems from his dislike of the company’s billionaire CEO, Jeff Bezos, who also privately owns The Washington Post.
“It’s been pretty clear from his tweets, both his recent ones and going back a number of years, that he links Bezos’ ownership of The Washington Post with the fact that he’s also the CEO of Amazon,” Sean Mullin, the executive director of the Brookfield Institute, explained to Global News.
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The newspaper has been repeatedly slammed by the president as “fake news.”
Last year, it won a Pulitzer Prize for its investigation of Trump’s donations to charities, which found that many of Trump’s philanthropic claims were exaggerated and often were not charitable donations.
Mullin notes that there’s little evidence to suggest that Bezos has changed the editorial independence of the newspaper, or its mandate, since buying it in 2013.
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However, White House Deputy Press Secretary Raj Shah has been quick to deny that Trump has a personal grudge against Bezos or Amazon.
“A lot of people have made this, with respect to Amazon, about personalities and the CEO at Amazon – we’re talking about Jeff Bezos here,” he said last week on Fox News. “It’s really about policy.”
What action can Trump take?
Trump essentially wants the postal service to increase shipping costs for Amazon, but his list of options doesn’t end there.
On Monday, Vanity Fair reported that advisers close to Trump have also encouraged him to cancel Amazon’s multi-billion contract with the U.S. defence department to provide cloud computing services.
As president, Trump could also push attorneys general in Republican states to open probes into Amazon’s business practices.
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Could this actually hurt Amazon?
Amazon shares were up about 0.2 per cent in Tuesday morning trading on the Nasdaq after trading up about 1.8 per cent earlier on Tuesday before Trump’s latest tweet.
But the company’s shares fell more than 5 per cent Monday, following another Trump tweet that promised unspecified changes to Amazon’s dealings with the postal service.
Walid Hejazi, an associate professor of international business at the University of Toronto, explained that “there’s a lot of uncertainty” over how Amazon will truly be affected by Trump’s twitter rants.
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But Hejazi said he expects things will blow over, and the retail giant will not be hurt in the long term.
“I think materially, but it’s hard to know for sure, that over the long term it’ll have no effect. I don’t think Donald Trump will be able to do anything legislatively that will undermine the success of Amazon,” he said, adding that Trump will probably switch to criticizing something else in the next few days.
The professor added that consumers, who like the products and services that Amazon offers, are unlikely to turn away from the company.
— With files from Reuters, The Associated Press
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