Why Does Trump Keep Attacking Amazon?
As with his comments on the Time Warner-AT&T merger, the president seems to have valid critiques of the company’s practices—but with strongly personal and political motivations.
President Trump may have earnest reasons for his onslaught against Amazon, which he renewed Thursday morning on Twitter. But it’s the latest case where Trump’s previous statements suggest he has more personal, and dangerous, motives than he claims.
A day after Axios reported that Trump is “obsessed” with the huge retailer, he confirmed the story in a tweet:
I have stated my concerns with Amazon long before the Election. 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!— Donald J. Trump (@realDonaldTrump) March 29, 2018
That’s a high-density mix of fact, accusation, and possible ulterior motive that demands dissection. The upshot is this: Trump is taking a position that is somewhat populist—a rare actual occurrence, even though the label is often applied to him. But because of his selective outrage, and his history of negative comments about Amazon CEO Jeff Bezos and The Washington Post, the newspaper Bezos owns, Trump’s lashing out now reads as conflicted at best and bad faith at worst.
Let’s pick apart the tweet. The idea that Amazon poses a challenge to smaller retailers is generally accepted. On taxes, Amazon has historically paid little state-and-local tax, and lobbied against being forced to pay it. But the company lost that fight, and now pays taxes in every state with a statewide sales tax. It has also supported a federal law to standardize state-tax collection on online retailers, arguing a consistent system would allow for easier conduct of business. (The latest frontier is taxation of third-party merchants who sell goods through Amazon.)
Accusing the U.S. Postal Service of being Amazon’s delivery boy is kind of funny, since delivering things is the business of the post office. But the idea that Amazon is getting a subsidy is not original to Trump. Citing a Citigroup analysis, Josh Sandbulte wrote in The Wall Street Journal last year that every Amazon package is shipped for $1.46 below market rate. The reason is somewhat complex:
In 2007 the Postal Service and its regulator determined that, at a minimum, 5.5% of the agency’s fixed costs must be allocated to packages and similar products. A decade later, around 25% of its revenue comes from packages, but their share of fixed costs has not kept pace. First-class mail effectively subsidizes the national network, and the packages get a free ride.
In other words, it’s not that Amazon is getting preferential treatment, per se, so much as it has found and exploited a loophole in the system. Other companies could theoretically use the same loophole, but Amazon’s size means it derives a unique advantage. There’s also a separate-but-intertwined leftist critique of the Amazon-USPS link, which contends that the deluge of Amazon packages is creating an undue burden on blue-collar workers in the Postal Service.
Taken together, these factors offer a range of valid reasons for being skeptical of Amazon, from both the right and the left. Small businesses are a sacred cow of American politics: For conservatives, entrepreneurs are the heroes of American life; for progressives, mom-and-pops are a bulwark against creeping corporatism. There are strong, bipartisan arguments against any policy that allows one company unfair advantage.
In fact, the left has been notably critical of Amazon, both in its own right as an accused monopolist, and as part of a broader push for stronger antitrust enforcement. Liberal wonks like Matt Stoller have argued that the Democratic Party would be well served to return to the trust-busting that was once an important part of its identity. (Separately, there’s a longstanding liberal critique of Amazon’s often appalling labor practices, especially at the warehouses that are central to its business model.)
The Trump administration has, in some ways, aligned with the progressive critique. In addition to Trump’s putative concerns about Amazon, the administration moved to block the merger of Time Warner and AT&T, a move that was somewhat surprising from a Republican administration, and pleased progressives while dismaying anti-regulation conservatives.
There’s a certain cleverness in Trump attacking Amazon, or Time Warner and AT&T. He is pushing ideas with which some of his most dedicated critics on the left agree, and voters are unlikely to mobilize en masse in sympathy for big corporations. If executed effectively, Trump could force himself into an alliance of convenience with Amazon’s critics. Of course, the critics aren’t naive—Stoller can be as scorching about Trump as he is about Amazon—but Trump’s stance forces them to find a difficult balance if they think the president is doing the right thing for the wrong reason.
Both of these cases present evidence that Trump might be using the federal government to punish his political opponents. As New York’s Jonathan Chait laid out Wednesday, the president’s critiques of Amazon are inextricable from his longstanding attacks on the Bezos-owned Washington Post, which in turn are part of a broader attack on media outlets that he perceives to be unfriendly to him. After the Post revealed in July 2017 that Trump had ended a program to arm groups fighting against Syrian dictator Bashar al-Assad, the president lashed out. He said, falsely, that the “Amazon Washington Post fabricated the facts on my ending massive, dangerous, and wasteful payments to Syrian rebels fighting Assad.” He also presaged Thursday’s tweet by asking, “Is Fake News Washington Post being used as a lobbyist weapon against Congress to keep Politicians from looking into Amazon no-tax monopoly?”
Perhaps Trump is genuinely concerned about mom-and-pops, the viability of the USPS, and consumer protection. But if so, he hasn’t done much to demonstrate that in other realms of policy. His administration has backed state collection of taxes, but Amazon already pays those. The White House tax plan focused on major companies rather than small businesses. The president hasn’t pushed Congress to abate what critics call an artificial fiscal crisis at the Postal Service, and in fact suggested cutting back delivery to five days per week. Even as antitrust enforcement is robust, Trump is working to dismantle the Consumer Financial Protection Bureau. Meanwhile, his previous linkage of Amazon and the Post make fairly clear that he has animus against Bezos and sees attacking Amazon as a way to attack his critics in the press.
The same holds true in the Time Warner case. Again, there is a legitimate argument that the merger would produce excessive consolidation in the TV business, allowing the company to jack up consumer fees. (A federal judge is currently hearing a case on whether the deal can go forward.) Yet Trump’s sustained assault on CNN, a Time Warner property, seems to give his administration a motive that is not rooted in good governance or consumer protection. As my colleague Julia Ioffe wrote of the Time Warner case, using the levers of government to chill and crush dissenting press has been a highly effective tactic for Vladimir Putin.
While the federal government says the merger was blocked at the agency level, AT&T contends that Trump played a factor and that the decision was politically tainted, and it’s using that argument in court. This isn’t the first time that Trump’s remarks on Twitter and elsewhere have been dragged into legal proceedings. In at least two major cases—on his travel ban and his prohibition on transgender members of the armed services—federal judges have blocked actions by the administration that might otherwise have been fully aboard, finding that the president’s comments suggested animus motivated him.
Trump’s extensive personal feud with Amazon and Bezos in this case creates a dizzying inversion of politics as usual. Politicians often ask the people to take what they say at face value, discounting other possible motivations. In trying to reposition his critique of Amazon as disinterested good government, Trump is asking the reverse: He wants voters to dismiss what he’s said, and to not take him at face value.