Trump accuses Amazon of not paying enough tax and exploiting US postal service

30 Mar 2018

Amazon package delivery. Image: Jeramey Lende/Shutterstock

Donald Trump continues to make his disdain for Amazon clear.

US president Donald Trump has long expressed negativity towards Amazon and its founder, Jeff Bezos. According to The New York Times, Trump has publicly criticised the company and Bezos more than a dozen times on his Twitter profile since 2015.

Trump accuses Amazon of poor business practices

He took aim at the company once again on Thursday (29 March), claiming that Amazon pays “little or no taxes to state and local governments” and accused it of using the United States Postal Service (USPS) as its personal “delivery boy”. He also said the e-commerce giant is responsible for the closure of many bricks-and-mortar retail businesses.

This online attack comes following an Axios report, which quoted a White House insider who described Trump’s apparent obsession with the company. The source also claimed that Trump had previously asked if there was a possibility that antitrust or competition law could be used in order to clip Amazon’s wings.

According to The Guardian, Amazon shares suffered a slight drop on Thursday after the previous trading session saw the company down 4.4pc after the Axios report.

A history of criticism

In December 2017, Trump criticised the company’s relationship with the USPS, arguing on Twitter that the latter was charging too low a price. Trump has also often criticised stories in The Washington Post, a newspaper owned by Bezos.

Deputy press secretary Raj Shah refuted claims that the president’s comments are part of a media vendetta, and told Politico that Trump viewed the two as separate issues. “A lot of people have made this, with respect to Amazon, about personalities and the CEO at Amazon – we’re talking about Jeff Bezos here. But this is really about policy,” Shah said.

“You have a huge company that’s done amazing things, in Amazon, spring up in a very short amount of time and, really, tax policy and other policy has to catch up to that so that way, those who are competing with Amazon are on a level playing field.”

On 28 March, Trump’s press secretary, Sarah Huckabee Sanders, said that the president’s administration had “no announcements and no specific policies or actions” that it was considering taking, but did not rule out the prospect.

Antitrust actions against Amazon have been previously suggested by its critics, but Trump himself has little authority to start this process. The US Federal Trade Commission or Department of Justice would need to get the ball rolling, and the latter has previously said it will keep political machinations out of corporate competition proceedings.

According to NBC News, Trump’s tax claims are not quite accurate. Amazon does not collect state sales tax from third-party sellers in parts of the US; in some cases, those sellers are required to collect the tax. Amazon collects sales tax in the 45 states that require it, but regulatory red tape at a local level dictates the collection of the tax and who it is collected by.

Trump’s assertion that the USPS is losing money due to its relationship with Amazon also doesn’t hold much water. Although the service is certainly losing money, the number of packages delivered increased by 589m in 2017, which can be partially accredited to Amazon.

While physical retail spaces are struggling, e-commerce is actually creating jobs in the US, with more positions on the way from Amazon. It is worth noting, though, that there has been major criticism of the company’s treatment of fulfilment centre workers in particular.

Amazon package delivery. Image: Jeramey Lende/Shutterstock

Ellen Tannam was a journalist with Silicon Republic, covering all manner of business and tech subjects