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Trump attacks Amazon on Twitter over tax and jobs

Twitter-Donald-trumpHaving a large market share is not illegal in the US – but that hasn’t stopped ill-informed US president Donald Trump from launching an extraordinary attack on Amazon on Twitter.

In a new tweet on Wednesday, Trump said Amazon was causing “great damage to tax-paying retailers,” and costing jobs.

“Towns, cities and states throughout the US are being hurt – many jobs being lost!” Trump tweeted, according to a Bloomberg news report.

The unexplained attack, which appeared to have no contextual relevance, follows earlier attacks during the election campaign during which he promised to pursue the company for antitrust violations should he be elected.

“Believe me, if I become president, do they have problems. They’re going to have such problems,” Trump said in February 2016.

But, as Bloomberg points out, in the US it is not illegal to have a large market share. While online retailing is growing in volume and in share of the total retail industry in the US, Amazon accounts for 30 per cent of e-commerce sales. Every other retailer in the US has the opportunity to sell online and Walmart, especially, is mounting an aggressive challenge to Amazon’s market share. Other online retailers have 70 per cent of the market.

In short: shoppers are spending less in physical stores and more online. They are not shifting from malls to Amazon, per se, as Trump appears to be stating. Furthermore, Amazon is expanding offline, starting to open physical stores. It has also acquired Whole Foods Market and plans to expand that business.

Trump has clearly not researched Amazon’s effect on the economy, either, before tweeting. Firstly, Amazon is collecting sales tax in every state where it is levied – just like every brick-and-mortar retailer (although third-party sales over its platform, accounting for about 50 per cent of sales through its portals, remain exempt via a loophole).

Secondly, Amazon has promised to hire more than 100,000 new staff in the US by 2018, countering some of the jobs lost through America’s shrinking ranks of retail stores.

“In some cases, fired department store workers are ending up at Amazon fulfillment centres,” observed Bloomberg.

There’s more to read in the Bloomberg column (with video), including Trump’s relationship with the Washington Post and Amazon (whose founder Jeff Bezos owns the paper). The Post has in the past criticised Trump in editorials – prompting the suggestion that Trump’s outbursts against Amazon are a means of trying to damage Bezos, because Trump doesn’t like some of the newspaper’s criticism of his chaotic regime.

This story first appeared on sister site Inside Retail Asia.

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