During the 2016 campaign, Donald Trump engaged in a long-running feud with the online retail giant Amazon. On multiple occasions, Trump pointed out that Amazon isn’t subject to state sales taxes, a loophole that allows the company to severely undercut its competition price wise.
To make matters worse, Amazon is run by CEO Jeff Bezos, owner of the Washington Post. Like other major media outlets, the Post’s coverage of Trump’s candidacy was overwhelmingly negative. Predictably, this reality only added fuel to the burning feud with Amazon.Last February, Trump escalated his criticism of Amazon to new heights, promising the company would have “problems” if he were elected president. Fast forward to the present, and Trump has seemingly delivered on that promise with one simple tweet.
President Donald Trump took to Twitter early this morning to attack Amazon, blaming the popular online retailer for job losses across the nation.
“Amazon is doing great damage to tax-paying retailers,” Trump tweeted. “Towns, cities and states throughout the U.S. are being hurt — many jobs being lost!”
Soon after the tweet, Amazon’s stock began to fall:
The tweet appeared to have some impact on Amazon’s market value, with the company’s stock falling as much as 1.2 percent following the tweet, according to CNBC. That amounts to a loss of approximated $5.7 billion in market cap.The news comes after Treasury Secretary Steve Mnuchin’s comments on the company:
Trump and Treasury Secretary Steve Mnuchin have both expressed issues with Amazon’s tax policies, particularly whether or not Amazon should be required to collect sales taxes on purchases in states where the company has no physical presence.
The National Conference of State Legislatures reported that the tax loophole cost states $17.2 billion in lost sales taxes in 2016. Amazon began collecting sales taxes from all 45 states that have a statewide sales tax on April 1, according to CNN.Amazon still doesn’t require shoppers to pay sales tax on purchases from third-party vendors that sell products through Amazon.
“I am encouraged that Amazon is now charging tax, I believe, on their own sales but not the marketplace,” Mnuchin said, according to CNBC. “I’m not sure I understand the consistency on that, but I respect the states’ ability that there’s an awful lot of money that’s not being collected.”
When Trump became president, many wondered how much his feud with Amazon would cost the company. For now, that number stands at over $5 billion. With over 3 years left in his term, one can only speculate where things will go from here.
[Note: This post was authored by Michael Lee. Follow him on Twitter @UAMichaelLee]