Trump tweeted another vague threat that he would somehow make life more difficult for Amazon. The consensus among observers is that the main object of Trump’s ire is the Washington Post, which is owned by Amazon founder and CEO Jeff Bezos but operates independently of Amazon.
Amazon shares fell as much as 4.5% in early trading Monday, a steeper drop than the markets, representing a decline in Amazon’s market value of around $30 billion. [UPDATE, 4:05 p.m. ET: Amazon stock closed down 5.2% Monday, leading a drop among tech stocks including Apple, Facebook, Netflix and Alphabet.]
“Only fools, or worse, are saying that our money losing Post Office makes money with Amazon. THEY LOSE A FORTUNE, and this will be changed,” the president wrote on Twitter. “Also, our fully tax paying retailers are closing stores all over the country…not a level playing field!”
In tweets on Saturday, Trump claimed that the U.S. Postal Service “will lose $1.50 on average for each package it delivers for Amazon. That amounts to Billions of Dollars.” He also accused “the Fake Washington Post” of being a lobbying arm for Amazon, without providing any facts to support the claim.
Trump’s attacks on Amazon over the U.S. Postal Service are not based on the facts. First of all, the USPS is not funded by American taxpayers. Amazon does have an agreement with the USPS to receive discounts (the terms of which are not public), but the independent Postal Regulatory Commission has verified as part of its annual reviews that the deal is profitable.
Moreover, while the postal service has lost money for more than a decade, that is primarily because of federal mandates that the agency cover billions in pension and health-care costs. In fact, package deliveries through Amazon and other shippers are one of the areas that’s growing for the USPS.
Trump’s claim that the postal service loses $1.50 per package delivered by Amazon isn’t accurate, either. It may be based on a misreading of a Citi Research analysis from April 2017 that said the USPS “does not act as a rational price-setter in the parcel market” and calculated that the postal service would have to increase its parcel-shipping rates by 50% in order to break even.
In addition, Amazon collects sales tax for customers who buy products in the 45 U.S. states that require it (although not all third-party vendors that use Amazon collect taxes).
Trump has long railed against Amazon and made threats about taking punitive action against the Bezos-run empire. The Republican president launched his latest round of tirades against the company last Thursday, repeating the charge that Amazon does not pay enough in taxes; claiming that it’s somehow leaching money from the postal system; and putting small retailers out of business. Amazon shares closed down 4.4% last Thursday, March 29, before recovering slightly Friday (up 1.1% for the day).
Both the USPS and Amazon have declined to comment on Trump’s outbursts.