Trump Escalates War With Bezos: "Amazon Costs Taxpayers Many Billions Of Dollars"

Update (3 pm ET): Once again, the White House has sought to mitigate Trump's anti-Amazon rhetoric, reiterating that there are currently no plans to turn the power of the federal government against the e-commerce giant.

Amazon shares recovered on the news.

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Update (12:41 pmET): The jawboning continues as Trump speaks again at the White House, and echoes what he tweeted earlier, namely that the U.S. is giving a subsidy to Amazon, while the U.S. Postal Service is losing billions of dollars on Amazon. Trump also said that the U.S. government loses $1.47 every time it delivers a package for Amazon,  citing a study.

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Update (11:40 am ET): In a late-morning tweet, Sherman dropped a stray detail that he excluded from his original piece - but which doesn't bode well for Amazon shares.

Sherman tweeted that "unlike Gary Cohn, Larry Kudlow agrees with Trump that Amazon is a 'problem', a source briefed on their conversations tells me."

 

 

Amazon shares have climbed off their lows for the day and are now essentially flat.

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Update (10 am ET): Trump doubled down on his anti-Amazon stance Tuesday morning, once again declaring that Amazon is draining money from the US Post Office and that Amazon "should pay these costs (plus) and not have them bourne by the American Taxpayer. Many billions of dollars. P.O. leaders don't have a clue (or do they?)!"

 

Shortly after, Amazon shares turned negative and was recently down 0.5%.

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Amazon shares shed another 5% during Monday's tech-led market rout, after Trump renewed his attacks on the company and its owner, Jeff Bezos, whom he's accused of transforming the Washington Post into his personal propaganda outlet and demanded that it register as a lobbyist.

In a flurry of tweets, the president claimed that anybody who believes Amazon isn't ripping off the Post Office is a fool (even as other more business-friendly Republicans have warned Trump that this isn't necessarily true, and that he should be quiet before he wrecks the market rally he's so proud of).

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He also insisted, once again, that the company pays little or no taxes (Amazon collects sales taxes in 45 states, but third-party sellers using its platform often do not).

Meanwhile, the tempest (not in a teapot) that has engulfed Amazon may continue for one more day following the publication of Gabriel Sherman's latest "inside the White House"-type story from Vanity Fair. In it, Sherman quotes several anonymous "Republican insiders" who told him that Trump remains committed to striking back at the world's richest man, Jeff Bezos, whom he accuses of marshalling the Washington Post's scathing coverage of his administration.

"He's off the hook on this. It's war," one anonymous source told Sherman. "He gets obsessed with something, and now he's obsessed with Bezos," said another. "Trump is like, how can I fuck with him?"

According to Sherman's sources, Trump is pushing for the Post Office to jack up the shipping rates that it charges Amazon. As recently as the beginning of the year, Trump would never have considered such drastic measures - mostly because he had Gary Cohn in the West Wing repeatedly reminding him of Amazon's role in driving the post-inauguration rally (it also has helped mitigate the harmful impact that email had on the Postal Service, Cohn would say).

"Trump doesn’t have Gary Cohn breathing down his neck saying you can’t do the Post Office shit," a Republican close to the White House said. "He really wants the Post Office deal renegotiated. He thinks Amazon’s getting a huge fucking deal on shipping."

But of all the punitive measures that Trump is considering to help stick it to Amazon, his advisers appear to be most amenable to the White House cancelling a pending multi-billion contract with the Pentagon.

Advisers are also encouraging Trump to cancel Amazon’s pending multi-billion contract with the Pentagon to provide cloud computing services, sources say. Another line of attack would be to encourage attorneys general in red states to open investigations into Amazon’s business practices. Sources say Trump is open to the ideas. (The White House did not respond to a request for comment.)

Trump has never been one to hold back while attacking his critics. He has savaged WaPo rival New York Times on many occasions, famously branding it the "failing New York Times." But there's an important distinction: No matter what the NYT writes about him, Trump will always retain a modicum of respect for the Gray Lady - after all, it's his hometown newspaper. The same cannot be said for WaPo.

"Trump doesn’t like The New York Times, but he reveres it because it’s his hometown paper. The Washington Post, he has zero respect for," one source said.

Trump also refuses to believe Bezos when the Amazon CEO says he protects the newsroom's editorial independence.

"When Bezos says he has no involvement, Trump doesn’t believe him. His experience is with the David Peckers of the world. Whether it’s right or wrong, he knows it can be done."

Regardless of what his advisors say, the newly emboldened president Trump isn't backing away from his threats against Amazon. At the core of the issue is Trump's old-school view of the American economy - he prizes the physical and the industrial over e-commerce and the transformative impact that the Internet had in pushing the US inexorably toward a services economy.

And to morally justify his crusade, Trump views it as a campaign to protect America's small business owners (an integral part of the Trump base). Which is why if we were Amazon shareholders, we'd be very uneasy.