FOR THE WEEK OF APR 09, 2018
Presidential tweets slap Amazon over its Postal Service deals – and maybe for another reason
Read about a new White House action or issue discussion. Summarize what's involved.
Look for a mention of online shopping or another Internet activity. Why is it in the news?
Try to find coverage of a local store that competes for sales with web retailers.
A target of presidential criticisms is closer to home than North Korea, China, Iran and even Mexico. Donald Trump accuses an American e-commerce giant, Amazon, of costing taxpayers "many billions of dollars" through discounted postal rates and alleged tax avoidance. "You have retailers all over the United States that are going out of business," he says in one of five tweets on the topic in a recent week. "If you look at the cost that we're subsidizing, we're giving a subsidy to Amazon." Another claims "Amazon [is] costing the United States Post Office massive amounts of money for being their Delivery Boy."
Amazon, which had 566,000 U.S. workers last year, is the nation's second-largest employer (after Wal-Mart, which has 1.5 million Americans on its payroll). To keep up with growth, the Seattle-based online retailer plans to build a second headquarters in a city to be chosen. But Trump reportedly considers asking the Justice Department to see if its business practices violate anti-monopoly laws. He also accuses The Washington Post — which is owned by Jeff Bezos, the founder and chief executive of Amazon — of functioning as a "lobbyist" on behalf of the retailer. Some commentators link the new attacks to critical coverage of the White House by the Post.
Presidential complaints on Twitter, which continued last week, began when he accused Amazon on March 29 of paying "little or no taxes to state and local governments" while taking advantage of the Postal Service and "causing tremendous loss to the U.S." Amazon actually collects sales taxes in all states that have such a levy, although that policy took effect just last year. It gets an undisclosed break on parcel-shipping costs under a contract that guarantees a huge volume of business for the Postal Service, a government-designated letter and package delivery monopoly.
In this online shopping era, package delivery overall has grown into a $20 billion-a-year business for the Postal Service, accounting for 28 percent of its total revenue. Another reason for Amazon's preferred rates is that it sorts boxes by Zip code and carrier route, then brings them to 20 postal distribution centers. By not using UPS or FedEx as its main carrier, the Postal Service says, Amazon helps cut its annual operating deficit. "In a very real sense," a Washington Post article says, "the arrangement is a win-win proposition -- a great deal for both Amazon and the Postal Service."
Washington Post says: "It is preposterous and disingenuous to suggest that The Post is used to advance Jeff's other commercial interests." – Fred Ryan, chief executive officer
National business leader says: "It's inappropriate for government officials to use their position to attack an American company." – Neil Bradley, U.S. Chamber of Commerce executive vice president and chief policy officer
Columnist says: "There are many reasons to be terrified of Amazon’s power, but Trump's ability to undermine it with a tweet is far scarier." – Michelle Goldberg, The New York Times
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