US President Donald Trump, who is of the thinking that the online retail company Amazon does not pay its share of postage, issued an executive order to examine and evaluate the United States Postal Service’s finances and operations.
Although Trump does not explicitly mention Amazon in the order, it is obvious that the financial equation between the online retail giant and the Postal Service is not very profitable. Time and again, Trump has publically blasted the Postal Service for stupidly losing billions of dollars to Amazon. However, Trump’s own advisers and Postal Service specialists have asked Trump to take a step back with his allegations. According to them, one of the top reasons why Postal Service is still financially solvent is because of Amazon.
Even though the service has reported consistent net losses over 10 years, it generates money from making packages (mostly for Amazon). However, Trump has consistently refuted all such arguments. Trump’s repeated attacks on Amazon and CEO, Jeff Bezos—who also happens to own The Washington Post—has led to a wide variety of negative articles (by The Post itself) based on him.
At one point, Trump tweeted that he might take some action against Amazon with the help of the government; this led to the dropping of Amazon’s stock in the market. In the order, Trump proposes to scrutinise different parts of the Postal Service’s operations, which includes the “expansion and pricing” of the package delivery market and also the service’s “universal service obligation.”
In the order, it is mentioned that the task force should inspect “the U.S.P.S. role in the U.S. economy and in rural areas, communities, and small towns,” which hints that the Postal Service will be further privatised. According to Trump, inflexible and substantial costs coupled with a decline in First-Class Mail volume have led to a structural deficit for the U.S.P.S. However, it’s still not very clear as to when will the task force be formed and to what extent will its evaluation impact Amazon.
Trump has created a similar commission in the past that was meant to investigate evidence of an alleged voter fraud in the 2016 election. This theory of his too was debunked by several election experts. Trump has asked the task force to deliver the findings with recommended legislative and administrative changes to him. Also, these recommendations should consider previous studies as well. According to a 2017 analysis by Citigroup, the prices charged by the Postal Service for package delivery were below the market rate.
Amazon’s shipping costs would increase by $2.6 billion, if the Postal Service increased its parcel rates. However, the designated task force does take into consideration Trump’s other concerns regarding Amazon. The online retail company reaped unjust advantage over brick-and-mortar businesses by not paying sales taxes. However now, the company charges sales tax on all of its products, except the products of third-party merchants.