President Donald Trump’s dislike for Amazon’s business model and the company’s owner is well known. However, there are rumors that the president will now take action against the company that could result in Amazon facing an anti-trust case in court, having to charge taxes for its goods, or even both.
An anonymous source who recently spoke with Trump stated that the president was concerned about Amazon for a number of reasons. As the president accurately noted, the online giant is putting mom and pop retailers out of business all across the nation. It’s also wreaking havoc on shopping malls, resulting in empty buildings that cannot be easily used for other purposes.
Furthermore, the president is displeased with the fact that Amazon’s tax rate is far lower than other, non-tech related companies. Naturally, on a personal level the president does not like Amazon CEO Jeff Bezos very much. Bezos not only criticized Trump extensively when he was running for president in 2016, but has since used his purchase of The Washington Post to regularly attack the president on various fronts.
Amazon’s effect on America’s economy is hard to ignore. The company has nearly 341,500 full and part-time employees; however, this is a paltry amount considering Amazon’s size and status. What is more, there are widespread allegations that Amazon mistreats many of its part-time employees. Some have claimed harsh working conditions, especially in Amazon’s order fulfillment warehouses. Others have charged Amazon with paying less than the minimum wage. At the same time, the number of jobs Amazon has created is far fewer than the number of jobs the company has eliminated.
It has been estimated that Amazon has caused a net loss of up to 222,000 jobs in the United States. Unfortunately, this is a problem that will only get worse if Bezos has his way, and is able to fully automate jobs such as order fulfillment and package delivery. While these jobs offer little in the way of pay and benefits, Amazon could very well put those who depend on them out of work in the foreseeable future.
How President Trump would hit back at Amazon has yet to be revealed. The anonymous source who first leaked the story to the press said that the president has wondered if there is a way to go after Amazon using antitrust and/or competition law. However, the United States government has in fact already made a move against Amazon.
A recent South Dakota law to tax internet sales wound up in court and the Supreme Court is set to hear the case in April and then rule on it in June. South Dakota, along with other states, are arguing that the earlier Supreme court ruling that states could not collect sales tax on mail order items should no longer apply as it was issued long before Amazon and other large e-retailers came into existence. The Trump administration has backed South Dakota in the case, lending weight to the state’s claims that it can in fact make people pay taxes on online purchases.
If the Supreme Court takes South Dakota’s side, it could lead to the generation of millions of dollars in state revenue while cutting into a significant portion of Amazon’s profits. At the same time, some members of Congress are calling for laws to be passed allowing taxes on online sales; these calls have not generated much action, but the president could get behind them, putting pressure on Republican lawmakers to create a law that would increase Amazon’s prices and make it far less competitive than it has been up to this point.
While it is not known if or when President Trump will take action against Amazon, it is clear that Amazon is vulnerable. The rumors of presidential action alone have caused Amazon’s stock to lose almost 11% of their value in just two days. Measures such as legal action and/or an internet sales tax law would cause company profits to slide, putting the brakes on Jeff Bezos’ desire to dominate the retail sector and become the first trillion-dollar company by market cap.
~ Conservative Zone