Trump slams Amazon on taxes, postal deal (Update)

Although he opposed Donald Trump in the 2016 campaign, Amazon CEO Jeff Bezos, seen at right next to Microsoft CEO Satya Nadella,
Although he opposed Donald Trump in the 2016 campaign, Amazon CEO Jeff Bezos, seen at right next to Microsoft CEO Satya Nadella, attended a meeting of technology leaders with the US president in June 2017
US President Donald Trump took a new swipe at Amazon on Thursday, claiming the tech giant fails to pay its share of taxes and takes advantage of the US Postal Service.

A tweet by the president about Amazon—a company he also criticized while on the campaign trail—renewed concerns that the online giant could face scrutiny by antitrust regulators.

"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!" Trump tweeted.

The comments came a day after a report by the news site Axios that Trump was "obsessed" with Amazon, believing the tech giant fails to pay enough taxes and gets preferential treatment from its agreement with the postal service.

The report said Trump's wealthy friends complain that Amazon is killing shopping malls and brick-and-mortar retailers, and had asked about the possibility of going after the online giant using antitrust laws.

Trump has long been at odds with Amazon founder Jeff Bezos, a vocal opponent of the Republican candidate in the 2016 election campaign.

Bezos is also the owner of the Washington Post, a frequent target of Trump's ire over its news coverage.

White House spokeswoman Lindsay Walters, asked if Trump was singling out Amazon, said only that "the president has expressed his concerns," adding: "We have no actions at this time."

Amazon did not immediately respond to an AFP query on the Trump comments.

Longstanding tensions

During the 2016 campaign, Trump said the US online giant could have "a huge antitrust problem" if he were elected, and suggested Bezos bought the daily newspaper as a move to protect Amazon "so that they don't have to pay taxes and don't get sued for monopolistic tendencies."

Bezos responded by offering to send the Republican candidate into orbit with his Blue Origin space exploration firm. But after the election, the CEO offered congratulations, tweeting, "I for one give him my most open mind and wish him great success in his service to the country."

Amazon shares, hit as broad decline in the tech sector over the firestorm following revelations of the hijacking of millions of Facebook users' personal data, rebounded Thursday with a gain of 1.1 percent.

Amazon CEO Jeff Bezos is seen touring the grand opening of the Amazon Spheres, in Seattle, Washington on January 29, 2018
Amazon CEO Jeff Bezos is seen touring the grand opening of the Amazon Spheres, in Seattle, Washington on January 29, 2018

Critics of Amazon have argued it has become too powerful because of its dominance of online retail, which could increase with its acquisition of the Whole Foods grocery chain.

The company has become a major player in cloud computing and streaming video, and has used its research in artificial intelligence to launch a popular line of devices powered by its digital assistant Alexa.

The recent surge in Amazon's share price has made Bezos the world's richest individual, worth more than $100 billion, even with this week's slump paring several billion off his fortune.

Amazon's 'HQ2' plans

Amazon last year announced plans to open a second headquarters as a companion to its home in Seattle, Washington, setting off a frenzied competition by states and cities offering tax breaks to the tech giant.

The new Amazon "HQ2" could provide an estimated $5 billion in investments and 50,000 new jobs, according to the company.

Amazon gained a reputation in its early years of paying little in taxes, in part because its retail operations lost money. But that has changed as profits rose, and it paid $412 million in federal income taxes in 2016.

According to one think tank, Amazon owed no federal income taxes in 2017 in part due to credits from a Trump-endorsed fiscal overhaul passed by Congress.

It has also reached agreements with most US states to pay sales taxes, after years of legal disputes.

Amazon has an agreement with the US Postal Service to deliver some parcels at bulk rates—a deal which some say provides a subsidy to the company but which others say helps the beleaguered postal operation.

Lou Kerner, a technology investor who blogs about the sector, said Trump's attack on Amazon "is a very populist thing to do," but that any new measures imposed on Amazon may do little for consumers or small businesses.

"Walmart was crushing the little guys before Amazon, and more of Amazon's growth is coming from the Walmarts of the world," Kerner said.

"Amazon would just pass the majority of the taxes on to its customers, so it's just a wealth transfer from millions of consumers, to a small number of shop owners (including Walmart)."

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© 2018 AFP

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