US President Donald Trump has returned to a favourite target, saying
that Amazon should be charged more by the US Postal Service for the
packages it sends around the world.
Amazon has been a consistent recipient of Trump's ire. He has accused the company of failing to pay "internet taxes", though it's never been made clear by the White House what the president means by that.
In a tweet on Friday (Saturday NZ time), Trump said Amazon should be charged "MUCH MORE" by the post office because it's "losing many billions of dollars a year" while it makes "Amazon richer".
Amazon lives and dies by shipping, and an increase in the rates
it pays could certainly do some damage. Amazon sends packages via the
post office, FedEx, UPS and other services.
In the seconds after the tweet, shares of Amazon, which had
been trading higher before the opening bell, began to fade and went into
negative territory. The stock closed down more than 1 per cent on
Friday. Broader markets also slipped.
Amazon was founded by Jeff Bezos, who also owns The Washington Post. The Post, as well as other major media, has been labelled "fake news" by Trump after reporting unfavourable developments during his campaign and presidency.
He has referred to The Post as the "AmazonWashingtonPost".
Amazon did not respond to a request for comment on Friday. A spokeswoman for the US Postal Service said, "We're looking into it."
Between July and September, Amazon paid US$5.4 billion (NZ$7.6b) in worldwide shipping costs, a 39 per cent increase from the same period in the previous year. That amounts to nearly 11 per cent of the US$43.7 billion in total revenue it reported in that same period.
In 2014, Amazon reached a deal with the US Postal Service to offer delivery on Sundays.
Trump has also attacked US companies not affiliated in any way with the news media.
Just over a year ago, he tweeted "Boeing is building a brand new 747 Air Force One for future presidents, but costs are out of control, more than $4 billion. Cancel order!"
Shares of Boeing dropped almost 1 per cent when trading opened that day, but recovered.
Several days later, again on Twitter, Trump said that Lockheed-Martin, which is building the F-35 fighter jet, was "out of control". Its shares tumbled more than 5 per cent, but they too recovered.
The US Postal Service has lost money for 11 straight years, mostly because of pension and healthcare costs.
One part of the operation that is not suffering, however, is shipping and packages, which handles Amazon and other online orders from retailers. In the year that ended September 30, the postal service reported higher-than-expected revenue of US$19.5 billion, "due to e-commerce growth".
The post office does not break down what is driving that growth, but online orders from retailers, particularly Amazon, has revolutionised the way goods are bought and delivered. Analysts at Bain & Co expected Amazon to capture 50 per cent of all online shopping growth during the holiday shopping season.
Amazon has taken some steps toward becoming more self-reliant in shipping. Earlier this year it announced that it would build a worldwide air cargo hub in the US state of Kentucky.
Shares of Amazon slipped 1.4 per cent on Friday to close at US$1169.47. The Seattle company's stock is up more than 57 per cent this year and surpassed US$1000 each for the first time in April.
Amazon has been a consistent recipient of Trump's ire. He has accused the company of failing to pay "internet taxes", though it's never been made clear by the White House what the president means by that.
In a tweet on Friday (Saturday NZ time), Trump said Amazon should be charged "MUCH MORE" by the post office because it's "losing many billions of dollars a year" while it makes "Amazon richer".
US President Donald Trump says Amazon should be charged more
by the US Postal Service for the packages it sends around the world.
Why is the United States Post Office, which is losing many billions of dollars a year, while charging Amazon and others so little to deliver their packages, making Amazon richer and the Post Office dumber and poorer? Should be charging MUCH MORE!— Donald J. Trump (@realDonaldTrump) December 29, 2017
In the seconds after Trump's tweet, shares of Amazon, which
had been trading higher before the opening bell, began to fade and went
into negative territory.
Amazon was founded by Jeff Bezos, who also owns The Washington Post. The Post, as well as other major media, has been labelled "fake news" by Trump after reporting unfavourable developments during his campaign and presidency.
He has referred to The Post as the "AmazonWashingtonPost".
Amazon did not respond to a request for comment on Friday. A spokeswoman for the US Postal Service said, "We're looking into it."
Between July and September, Amazon paid US$5.4 billion (NZ$7.6b) in worldwide shipping costs, a 39 per cent increase from the same period in the previous year. That amounts to nearly 11 per cent of the US$43.7 billion in total revenue it reported in that same period.
In 2014, Amazon reached a deal with the US Postal Service to offer delivery on Sundays.
Trump has also attacked US companies not affiliated in any way with the news media.
Just over a year ago, he tweeted "Boeing is building a brand new 747 Air Force One for future presidents, but costs are out of control, more than $4 billion. Cancel order!"
Shares of Boeing dropped almost 1 per cent when trading opened that day, but recovered.
Several days later, again on Twitter, Trump said that Lockheed-Martin, which is building the F-35 fighter jet, was "out of control". Its shares tumbled more than 5 per cent, but they too recovered.
The US Postal Service has lost money for 11 straight years, mostly because of pension and healthcare costs.
One part of the operation that is not suffering, however, is shipping and packages, which handles Amazon and other online orders from retailers. In the year that ended September 30, the postal service reported higher-than-expected revenue of US$19.5 billion, "due to e-commerce growth".
The post office does not break down what is driving that growth, but online orders from retailers, particularly Amazon, has revolutionised the way goods are bought and delivered. Analysts at Bain & Co expected Amazon to capture 50 per cent of all online shopping growth during the holiday shopping season.
Amazon has taken some steps toward becoming more self-reliant in shipping. Earlier this year it announced that it would build a worldwide air cargo hub in the US state of Kentucky.
Shares of Amazon slipped 1.4 per cent on Friday to close at US$1169.47. The Seattle company's stock is up more than 57 per cent this year and surpassed US$1000 each for the first time in April.
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