Why Trump Reportedly Is Taking Aim at Amazon
One of the country’s most prolific tweeters — President Donald Trump — has maintained a curious silence related to Facebook Inc. (NASDAQ: FB) and the data leak involving personal information on 50 million U.S. Facebook users. He appears, however, to be chomping at the bit to have a go at Amazon.com Inc. (NASDAQ: AMZN).
According to a report at Axios Wednesday morning, the president thinks the e-commerce giant has benefited from a free ride on taxes and special treatment from the U.S. Postal Service (USPS). A source told Axios, “He’s obsessed with Amazon.”
Sources also said that Trump has even “wondered aloud if there may be any way to go after Amazon with antitrust or competition law.” His rich friends tell the president that Amazon is “destroying their businesses” and the president’s real estate pals reportedly blame Amazon for poisoning brick-and-mortar retailers and shopping mall developers. There are, in fact, at least 10 retailers that would like to see Amazon take some presidential heat.
As for the president’s complaints about Amazon getting a sweetheart deal from the USPS, an Axios source said, “It’s been explained to him in multiple meetings that his perception is inaccurate and that the post office actually makes a ton of money from Amazon.”
The tax issue has been a thorny one for Amazon for years. The company now collects sales taxes on goods it sells in a state that collects sales taxes, but third-party vendors are not required to collect sales taxes. Republican Congresswoman Kristi Noem (R-ND) has said she opposes a plan for Congress to raise taxes, but she believes “out-of-state online retailers are aggressively exploiting a tax loophole, giving them a competitive advantage over local businesses.”
Amazon and other online-only retailers have taken advantage of a 1992 court ruling that states cannot collect sales taxes on mail-order goods unless the mail-order firm had a presence in the state to which the goods were shipped. The U.S. Supreme Court has agreed to hear arguments later this year in a South Dakota case that may change that prior ruling. The current Solicitor General has backed South Dakota in the case, according to a report at CNBC.
The real Amazon thorn in Trump’s side may be CEO Jeff Bezos’s ownership of The Washington Post newspaper. The paper has been highly critical of the president, and he probably would like nothing better than to stick his thumb in Bezos’s eye. Bezos is also many times richer than the president, another thing that probably irritates him.
Trump-friendly Fox News has posted no online comment yet on this story, while Breitbart.com, another usually Trump-friendly website, leads its story with the drop in Amazon’s share price.
Amazon’s share price did fall about 7% earlier this morning and traded down about 5.5% in the mid-afternoon at $1,414.58. The stock’s 52-week trading range is $850.10 to $1,617.54.