President Trump’s latest Twitter attack on Amazon, one of the world’s largest e-commerce companies, have caused their stock price to drop drastically. Instead of striking back like they have in the past, Amazon’s recent response is nonexistent. They feel silence is the best way to deal with an attack that they view as a true barrage on the Washington Post and its CEO Jeff Bezos, according to Politico.
Being one of the richest men in the world, Bezos net worth is largely contributed to by Amazon’s stock price, so a drop in stock due to the tweets also costs him billions of dollars. Trump’s recent tweets claim that Amazon is scamming the U.S. Postal Service and using them as their “Delivery Boy,” harming their business. He believes that Amazon is taking advantage of the reduced shipping rates they receive from the Postal Service. Additionally, he has made allegations that the U.S.P.S. loses $1.50 for every package it delivers.
The Postal Service however, is benefiting from its deal with Amazon as it counteracts its decline in business due to the convenience of email. Economists have proven that the subsidies are better for the economy and agree that Trump’s lashing out is doing no good. He is misleading the public to believe that Amazon is setting the country back “billions of dollars,” as indicated by Vanity Fair.
The Twitter war did not end there as Trump also accused Amazon of paying “little or no taxes to state & local governments […] causing a tremendous loss to the U.S.” and is “doing great damage to tax paying retailers.” He has reached the conclusion that Amazon is holding taxes overseas and wants to force them to bring foreign profits back to the states and pay taxes on them.
The New York Times has come to Amazon’s defense making it clear that they have been collecting state taxes in California since 2012 and currently collects taxes in all perinate states. Yearly reports filed with the Securities and Exchange commission show that Amazon’s total income-tax has increase from $177 million in 2014 to $957 million in 2017.
The U.S. Chamber of Commerce is displeased with government officials like Trump using the power their position grants them to attack American companies, and Neil Bradley who is the executive vice president and chief policy officer of the chamber emphasizes that an incident like this “undermines economic growth and job creation,” as cited by the Times. Amazon’s stock has since recovered but following the tweets it dropped about five percent as investors faced the threat of Trump breaking the company apart or raising the its taxes.
“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.” Trump is ignoring the analysis by his own economic advisors and is threatening Amazon with antitrust action. His advisors do not find Amazon at fault and the company knows this battle is not truly centered around itself, which is why they have decided to lay low with the hopes that these accusations will blow over.