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Trump is dead wrong about Amazon, former Sears Canada boss says

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Investors may be momentarily swayed by President Donald Trump’s Twitter rants about e-commerce giant Amazon, but that doesn’t make his claims any truer. In fact, there’s no basis to them whatsoever, says Columbia Business School professor, Mark Cohen.

Last week, shares of Amazon fell sharply after comments from President Trump which accused Amazon of paying too little for getting its packages shipped through the US Postal Service, stating on Twitter that the USPS “loses billions of dollars shipping packages for the online giant,” and that Amazon pays “little or no taxes to state & local governments.” After President Trump’s comments, the stock lost over 11 per cent for the week.

But sources have since come out to challenge Trump’s claims, notably, the New York Times, which pointed out that Amazon does, in fact, collect sales taxes in all states that levy them along with having paid US$412 million in income taxes in 2016 and a whopping US$957 million in income taxes in 2017.

On the issue of the USPS, the Times wrote that the corporation has reported net losses for a decade now, due for the most part to declines in first class mail and marketing mail. In fact, they argue, packages and shipping are now areas of growth for the USPS that are effectively offsetting other shortfalls in revenue.

Let’s face it, if the Washington Post endlessly praised [President Trump] and his administration, [President Trump] would be singing the praises of this archetype of American success, similar to the archetypical success that was Walmart 30 years ago…

In a conversation on CNBC, Columbia Business School director of retail studies and former Sears Canada CEO Mark Cohen reiterated the point, saying, “Amazon is not exploiting anything. The Post Office has always offered bulk-rate discounts to bulk users – this is not a new condition. Amazon [also] negotiates for bulk-rate discounts from FedEx and UPS and all the myriad of carriers that they use.”

“This whole notion that they’re taking advantage of the little guy and the consumer is completely false,” Cohen says. “The biggest problem that the post office has is the ongoing, continual decline of first class mail, and that’s not Amazon’s fault. The last problem they have on their list is their business with Amazon. They need Amazon an awful lot more than Amazon needs them. If Amazon were to pull the plug on its business with the post office, the post office would be in an accelerated state of decline.”

Cohen takes issue with President Trump’s continued attacks on Amazon, suggesting that Amazon’s success is the quintessential American success story and that the President’s critique amounts to a personal vendetta against the Washington Post and its owner, Amazon.

“Let’s face it, if the Washington Post endlessly praised [President Trump] and his administration, [President Trump] would be singing the praises of this archetype of American success, similar to the archetypical success that was Walmart 30 years ago,” says Cohen.

“Amazon started because Jeff Bezos thought he had an interesting idea. He created it from his garage in Seattle. 25 years later, it’s one of the largest enterprises in the world, growing faster than just about anybody in the world,” he says, “what’s wrong with this picture?”

About The Author /

Jayson is a writer, researcher and educator with a PhD in political philosophy from the University of Ottawa. His interests range from bioethics and innovations in the health sciences to governance, social justice and the history of ideas.
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