Published: Mon, April 02, 2018
Finance | By Gustavo Carr

President Trump goes after a favorite target: Amazon

President Trump goes after a favorite target: Amazon

Trump this week retweeted videos by far-right British politician Jayda Fraser that purported to show Muslims performing violent acts.

The tweet comes a day after Axios reported that the president has been "obsessed" with Amazon, focusing on how the company is taxed and how the company uses the United States Postal Service. "Unlike others, they pay little or no taxes to state and 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!"

Amazon has not responded to Trump's tweet.

Inc. has lost its hold as the third-most valuable USA company by market capitalization, as the recent selloff in the e-commerce giant's stock has knocked it below Microsoft.

To his credit, Trump has voiced his "concerns" with Amazon for years, as he said on Thursday.

The new Amazon "HQ2" could provide an estimated US$5 billion in investments and 50,000 new jobs, according to the company. Amazon pays taxes in most states. The report has sparked a ton of speculation about what that will mean for Amazon moving forward, and Trump only added to that with an early-morning tweet. White House spokeswoman Lindsay Walters said today that some Amazon users don't pay sales taxes, such as third-party vendors who sell their goods through the site.

The White House defended Trump's statement, saying action is being planned. That ruling said that retailers must collect sales taxes only in states in which they have a physical presence. "And that's about half of their sales", he said.

The digital retailer's decision to collect state sales tax is mostly voluntary, as a 1992 Supreme Court ruling effectively gave a free pass on state taxes to companies with no brick-and-mortar property or employees in the state.

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Investors largely waved off concerns about that on Thursday.

While Amazon has a special partnership with USPS to deliver on Sundays, it does not get a special rate. It's important to note that there are lots of other things going on in the world besides Trump's tweets that could affect the stock, but the president certainly has an impact.

As for the Postal Service, it has lost money for years, but online shopping has led to growth in its package-delivery business.

A spokesman for the U.S. Postal Service declined to comment.

An independent agency of the USA federal government, USPS reported a net loss of $2.7 billion for fiscal 2017, largely due to increased costs of retirement benefits. Last year, packages constituted 28 percent of the total, with the segment increasing 12 percent year over year.

"Common sense suggests USPS needs Amazon more than Amazon needs USPS", Stifel analysts wrote in a research report this week.

There's no mention of a possible integration with Amazon Prime, but it's more than likely that an Amazon banking service could be included in the retailer's popular subscription service. But other megastores like Walmart share much of the blame for that.

Amazon-Washington Post connection. While Jeff Bezos is the CEO of Amazon and the owner of the Washington Post, there is no evidence that he has interfered in the editorial decisions (Fortune). Amazon would have access to a lot of personal information about young people before they turn 18, including, of course, their spending habits.

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