Amazon is the latest company to get President Trump’s own brand of condemnation as the Commander-in-Chief takes to Twitter to rant and rave.
The attention from the oval office has seemingly gotten a few people a little bit uncomfortable as share price has dipped by about 2% during overnight trading, as it seems Trump is targeting the interesting tax set up at the internet giants offices. There have been rumours Trump has been stalking CEO Jeff Bezos to figure out how he can claw back some tax dollars.
White House spokesperson Sarah Sanders commented that there “aren’t any specific policies on the table at this time,” but Trump was “looking to create a level playing field for all businesses”.
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
The issue here is down to physical presence. Legal precedent has been set in the US stating that the individual states cannot claim sales tax where the company does not have a physical presence. Certain states now argue that the world has changed since the original ruling in the early 90s, and therefore the rules should change also.
This is not the first time the President has targeted Amazon however. Last August, Trump criticized the company for causing great damage to smaller retailers causing a 1.2% drop in share price. Amazon may be causing damage to some businesses, but it (as well as other eCommerce sites) are enhancing prospects for those who are digital orientated. The number of potential customers go through the roof and some of the most notable overheads disappear.
The issue here is that Trump wants to protect those who have been making money in the more traditional manner. The real estate gurus who build shopping malls or high streets around the country; these are the people who are becoming increasingly vulnerable in the connected economy. One aspect of the rant which we can’t get our head around is the comment about destroying the US postal system.
Items purchased through Amazon are mostly sent through the public postal system, and while we imagine Amazon would have negotiated favourable rates, the sheer volume would surely kick economy of scale into action. Considering few people send letters anymore, we wonder what the condition of the postal service would be without it being propped up by the eCommerce giant. Last year, revenue from package deliveries increased $2.1 billion (12% year-on-year) which is seemingly the only area of the postal service which is successful. The basic concept of the postal service is in crisis, but Amazon (and other eCommerce deliveries) seem to be the only thing propping up the successful part!
Interestingly enough, Facebook has not received any criticism from the President, so you have to wonder whether there is another reason for the dislike of Amazon. Both companies should tick the box for Trump when it comes to abusing the American people, but only one of the owners owns a major news publication which doesn’t bend to the will of the erratic President.
The next couple of months might be a pretty uncomfortable period for Amazon and Jeff Bezos. Trump might be respected by all as an incredibly intelligent, compassionate or logical individual, but when he makes a promise he almost always follows through with it.