President Donald Trump continued its attack on Amazon on Monday. He claimed that the United States Postal Service (USPS) is losing so much money from its delivery agreement with the e-commerce giant.
In a tweet, Trump said only fools believe that the post office is making money with Amazon. He emphasized that it is losing a fortune.
The President also blamed the e-commerce giant for the failure of retailers to keep their stores open across the country. He suggested that the playing field is not level since the retailers are paying full taxes.
Only fools, or worse, are saying that our money losing Post Office makes money with Amazon. 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!
— Donald J. Trump (@realDonaldTrump) April 2, 2018
In November, USPS reported that its revenue dropped by $1.8 billion for the fiscal year 2017—largely due to the rapid declines in first-class and marketing mail volumes. It financial performance was partly offset by its package deliveries, up by 589 million pieces of 11.4%.
For years, USPS has been losing money because of its yearly payments or more than $5 billion. The Congress mandated the post office to prefund the pension and health benefits for its retirees.
Amazon lost almost $45 billion in market value
Investors are becoming increasingly worried about Trump’s attacks on Amazon, which could encounter additional regulation. Last week, Axios reported that the President is wondering if the government could use antitrust or competition law to go after the company.
Earlier on Monday, Amazon lost nearly $45 billion in market value. AMZN shares went down to as low as $1,361 per share, down by almost 6%.
At the time of this writing, around 2:32 PM Easter Time, the company’s shares were trading $1,371.71 per share, still down 5.26%.
On Saturday, Trump claimed that Amazon is not paying enough taxes to local and state governments. He criticized the e-commerce giant’s contract with USPS as a “scam.” He suggested that if the post office will raise its parcel rates, Amazon’s shipping costs would increase by $2.6 billion.
In a note to investors, analysts at Morgan Stanley wrote, “We believe the U.S. Postal Service (USPS) has gained share from Amazon which is helping the USPS stay afloat.”
On the other hand, DA Davidson analyst Tom Forte said “the USPS was losing billions before it expanded its service offerings to Amazon. The USPS would, still likely to lose billions if the e-commerce giant discontinued using its service tomorrow.