President Trump has waged a war of words against Amazon, the multi-billion dollar retail-tech corporation whose CEO Jeff Bezos also happens to own The Washington Post.
Through a series of unexpected tweets, the president unleashed a critical tirade against the company that resulted in plummeting stocks and some brief economic turmoil — before the West Wing finally calmed down and the company price rebounded the following Tuesday.
Let’s dig into the president’s arguments.
What’s The President’s Case?
On March 29th, a tweet was published by the president accusing Amazon of “putting many thousands of retailers out of business.”
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
On March 31st, the president published a chain of tweets blasting the tech giant, alleging they undermine American prosperity:
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
We can break these down into three concrete accusations:
1. Amazon Avoids Paying Their Taxes:
Remember how we warned you to hold back on the tax cut celebrations? Well, perhaps Trump should have heeded our warning as well. While this may give the president the appearance of a Bernie Sanders figure, railing against the millionaires and billionaires, it was the GOP tax bill that slashed corporate taxes for mega-corporations like Amazon from 35% to 21%, leaving in all the loopholes he swore to close.
According to Vox, current laws dictate that a state can only charge internet retailers a sales tax if that retailer maintains some form of physical store or manufacturing presence within their state lines. If you’re just a standard retail store, that understandably puts you at a decisive disadvantage. But as outlets like The New York Times have shown, because of the company’s vast expansion of warehouses over the years, Amazon DOES pay their sales taxes in every state that has a sales tax — meaning states who don’t have a sales tax are the ones theoretically missing out on that Amazon money.
Previously there was a sales tax loophole involving third-party vendors selling products on Amazon, but that particular loophole has been closed as of the end of last year. Being that this is something Trump has complained about for a while it does give slightly more credence to his argument, but at this point, the reduced revenue from taxes has far more to do with the across the board cuts to corporate taxes than anything else.
2. The U.S. Postal Service Is Getting Screwed:
This has been the president’s most frequently used line of attack against Amazon and Bezos — mostly because he’s not a hypocrite on this issue.
Scan over the likes of Snopes or Politifact and they dismiss the president’s comments quite solidly — despite the postal service’s increasing accounting losses since 2011. Since last November, it’s believed the postal service experienced a net loss of $2.7 billion, a continuing trend from previous years. Fox Business estimates that’s more than a $63 billion loss since 2007.
But is this simply a case of “fuck you, Amazon”?
Well, delivering so many Amazon packages does make the service money, with packages accounting for a $2.1 billion increase in revenue seen by the USPS in 2017. First-class mail, however, which generates much of the USPS’s profit, is on the decline with the rise of the tech industry – something that will undoubtedly become more of a factor once technologies like autonomous vehicles and drones become commonplace. At this rate, Trump seems to be trying to make the best out of a future automation eventuality — suggesting the USPS could charge Amazon more for services like its last-mile deliveries, but there’s still the possibility that the USPS will eventually be outcompeted by the likes of companies such as FedEx.
It’s simple free market economics — and the post office just isn’t competitive.
3. Bezos and The Deep State Post:
While it may be simple fun to see the president attack mainstream newspapers - particularly ones that have continually misrepresented the Russia scandals and helped facilitate the 2003 Iraq invasion - we can’t ignore Trump’s accusations against the Washington Post — owned by the highest billionaire in the land, Jeff Bezos.
After all, how can we trust a news organization owned by a man with a pending multi-billion dollar Amazon-Pentagon contract to give you the straight dope on Amazon, The Pentagon, and their boss? Of course, the Post denies that Bezos has any part in newsroom decisions, but how do they explain the punishment of Fredrick Kunkle? According to The Huffington Post, a decidedly left-wing publication, Kunkle is a freelance writer who writes for Metro, HuffPost and the Bezos owned Washington Post. Of course, Kunkle can never question the dear leader in his own paper, so he published a HuffPo op-ed critical of “one of the wealthiest men in the world… thinking of ways to give back” who he later says is “still taking from the very people who helped him build his fortune.” The article, published September 1st, highlighted the many ways the billionaire tried to pinch every nickel and dime out from the newspaper’s union, where Kunkle was the co-chair with insider knowledge.
What happened to Kunkle? While the Amazon mobsters didn’t brake his legs, the Post issued a strongly worded disciplinary letter alleging that, through his Huffington Post op-ed, a paper that Bezos has no ownership of, Kunkle had somehow committed an “egregious violation of the Post’s ethics policy on freelancing” — before the Washington-Baltimore News Guild filed an unfair labor practice charge with the National Labor Relations Board, accusing the Bezos owned newspaper of violating the man’s first amendment rights and his protected right to engage in “concerted activities” to further the union’s interests.
This simple case highlights the Amazonian nature Bezos has imposed on the Post, expecting his reporters to either play ball or punish writers for the work they do across other newspapers they’re free to associate with. It does ring of political lobbying, which gives the president unfortunate credence to his tired use of “fake news.” Sources for Vanity Fair say the president has “no respect” for a paper he alleges is on the level of The National Enquirer, telling journalists: “When Bezos says he has no involvement, Trump doesn’t believe him. His experience is with the David Peckers of the world. Whether it’s right or wrong, he knows it can be done.”
With all these claims in the proper context, we must ask ourselves this:
Will Trump Actually Do Anything?
To steal the Twitter bio of right-wing commentator Dave Rubin, “Twitter is not real life.” Given that the company has continually stored money overseas via “tax havens” and loopholes that could have been driven out in a revised GOP tax bill, the president simply talks of cold war with Amazon without any political missiles fired.
Then there are the frequent reports of the mistreatment of warehouse workers, something that Trump could conceivably address by exercising a little bit of political muscle through threatening to pull Amazon’s Pentagon contract if he were so inclined. At the moment, however, it seems that despite the tough talk on Amazon for Trump the reality for the company is relatively consequence-free.