The Truth About Trump's War on Amazon and the US Postal Service

15 April, 2018, 06:29 | Author: Laverne Higgins
  • Trump launches task force to evaluate Postal Service operations

The Postal Service issued a statement Friday welcoming the task force.

The order does not specifically mention online shopping giant Amazon but Trump has complained that the company's deal with the USPS is a money loser for the service.

Packages have been one of the few bright spots in Postal Service's finances because first-class mail, its financial mainstay for decades, has fallen sharply. Is this executive order motivated by the desire to preserve a vital American institution, or the need to inflict corporate harm on a presidential enemy?

Trump issued the order on Thursday forming an administration task force, to be chaired by Treasury Secretary Steven Mnuchin, and directed it to evaluate the Postal Service's finances and operations, the Washington Post reported.

Additional reporting from Newsy affiliate CNN. Trump has also gone after Bezos personally and accused The Washington Post, which he owns, of being Amazon's "chief lobbyist". The creation of the task force comes nearly two weeks after Trump lashed out on Twitter, attacking Amazon, saying it was draining the USPS of money it can't afford to lose.

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Were Amazon to elect not to absorb these costs in the event of a USPS rate hike, Credit Suisse says the firm could increase the cost of its Prime membership, which has been $99 a year since 2014 while Amazon has added more video, music, and faster shipping options to the membership.

The Postal Service is a government agency, but it operates as an independent business without direct taxpayer support. Credit Suisse estimates this could amount to a hit of $1 billion to $1.8 billion to Amazon's bottom line.

Amazon and other companies, like FedEx and UPS, drop off sorted packages, and a postal worker delivers them on their usual route.

What will happen is anyone's guess at this point, as a few important variables are unknown, such as whether the USPS will indeed hike its rates, how much such an increase would be, and how many packages the agency now delivers for Amazon. "Without this obligation, the Post Office actually turns a profit". But the USPS is still most likely undercharging businesses - not just Amazon - to ship packages. "It's also notoriously hard for cities and states to not lose money from maintaining subways and publicly owned parks, which is why those services are heavily subsidized by tax dollars and user fares".

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