President Donald Trump continues to attack Amazon over claims that the company doesn’t pay state income taxes. The President also says USPS loses money on every package it delivers for Amazon. In reality, the President’s attacks are more likely about Amazon destroying his own business interests and less about protecting the USPS.
President Trump lost more than $600 million in 2017 and research from Forbes pointed to a major decline in brick & mortar sales which decreased the value of Trump’s real estate holdings, specifically in New York City.
In October 2017, Forbes revealed that the 45th POTUS was worth $3.1 billion, down from $3.7 billion a year early. “Values of several Manhattan properties, particularly those on or near Fifth Avenue, have dropped, shaving nearly $400 million off his fortune,” the magazine says.
E-Commerce Is Hurting Trump
Forbes assistant managing editor Kerry Dolan appeared on CNN during the initial report and explained how brick & mortar stores are suffering in an e-commerce landscape. Even major brands like Nike have witnessed a decrease in traffic at flagship stores which deliver a large amount of revenue for Trump-owned properties.
“We talked to tons and tons of real estate brokers who are super familiar with the properties, particularly in Manhattan,” Dolan told CNN.
With skyrocketing real estate costs in New York City and other urban areas, retailers are feeling the sting of lost business combined with high rental costs. A quick examination of the once famous Toys R Us flagship store in Times Square showcases the problems being faced by NYC retailers. The now-defunct retailer went from paying $400 per square foot in 2011 to more than $2000 per square foot per year in 2015. Rent ballooned to more than $42 million per year just for the locations bottom floor.
Amazon Shares Fall
If President Trump is attempting to hurt the bottom line of Amazon, his attacks are working in the short-term. Amazon shares were trading down 4.5% on Monday morning. In the long-term, it’s highly unlikely that Amazon will suffer much from Trump’s attacks. The Amazon platform has reduced the cost of goods while providing quick shipping, sometimes in as little as one hour, to customers all over the United States.
While some industry analysts have claimed Amazon receives a “sweetheart deal” from Amazon, Morgan Stanley analyst Ravi Shanker wrote in a note that the brokerage believes USPS has gained share from Amazon, which is helping USPS stay afloat.
Amazon shares have gained almost 20% in 2018. The e-commerce giant has a market valuation of nearly $700 million.
Unflattering Stories About Trump
President Trump is a vain man, a fact we have seen repeatedly when his attacks have become personal on Twitter. Jeff Bezos, founder, and CEO of Amazon has been at the heart of many Trump attacks through his privately owned Washington Post.
Trump reignited his Amazon claims immediately after the Post published a story that provided a rundown of how Trump’s presidency has increased legal scrutiny of his business empire.
And it’s not just Donald Trump who could be benefitting from his attacks against Amazon. An Axios report from Jonathan Swan claimed that “his real estate buddies tell him—and he agrees—that Amazon is killing shopping malls and brick-and-mortar retailers.”
There are most definitely issues with the Amazon model. The company currently only pays sales tax on items sold directly through its platform and not when the items are shipped from its third-party partners. However, to claim that Amazon is destroying the USPS because it worked out a deal that was agreed upon by all parties is both petty and provides nothing but a flat argument.