'Not a level playing field!': Trump goes after Amazon again, shares fall 5%

Markets Reporter
Yahoo Finance

President Donald Trump is not done attacking Amazon (AMZN).

In a tweet on Monday morning, Trump reiterated his belief that Amazon costs the United States Post Office, and by extension U.S. taxpayers, billions of dollars as part of a “scam” being run by the online retailer.

“Only fools, or worse, are saying that our money losing Post Office makes money with Amazon,” Trump tweeted Monday. “THEY LOSE A FORTUNE, and this will be changed. Also, our fully tax paying retailers are closing stores all over the country…not a level playing field!”

Trump’s latest broadside on Amazon follows attacks from Trump on Amazon last week and over the weekend and continues what’s been a long-running crusade against the company’s founder and CEO, Jeff Bezos.

In addition to running Amazon, Bezos owns The Washington Post through his personal investment fund, though he does not have a day-to-day operational role at the paper. The Post famously broke the existence of the Billy Bush tape in which Trump used lewd language to describe interactions with women. Trump has in the past referred to the paper as the “Amazon Washington Post.”

Last week, Trump responded to a report from Axios which said the President is not worried about the user data scandal rocking Facebook (FB) but is instead “obsessed” with finding a way to regulate Amazon.

Shares of Amazon were down over 5% in early trading on Monday amid a broader market sell-off being led by tech stocks, which have been under pressure for the last several weeks.

Turning free shipping into a future tax payers’ burden?

In his time running for president and since taking office, Trump’s attacks against Amazon and its relationship with the USPS have been a semi-regular feature of his Twitter habit. Trump has insisted that the USPS’ financial woes — the Post Office lost $2.7 billion in its fiscal year 2017 — are because it does not charge Amazon enough to deliver its packages.

Donald Trump has had it up to here with Amazon.And indeed, an analysis from Citigroup published in April 2017 said the Post Office is charging below-market rates and has “essentially turned free shipping into a future tax payers’ burden.” The upshot is that costs for Amazon and other e-commerce retailers could be impacted if there were a mandated increase in USPS rates to return the postal service to profitability.

Citi’s analysis added, however, that Amazon would be best-positioned to digest an increase in shipping costs either from the USPS or private carriers like UPS and FedEx.

Still, investors are clearly concerned over Trump’s tense relationship with Bezos and Amazon with his tweets pushing the stock lower. And it re-opens markets to the risk that the whims of Trump’s Twitter feed determine where stocks go on a given day.

This is the ‘headline risk’ president,” said Greg Valliere, chief global strategist at Horizon Investments.

“He clearly hates Amazon, and his tweets have hurt the company’s share price – even though policy action against the firm seems unlikely. Who knows what he will tweet next – against drug companies? Against trade with Canada? It’s anyone’s guess.”

Myles Udland is a writer at Yahoo Finance. Follow him on Twitter @MylesUdland

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