Trump & Bezos Head-to-Head on Tax Issues
The battle between Amazon CEO Jeff Bezos and United States President Donald Trump has been pretty heavily monitored in the last few weeks. The two businessmen have launched verbal strikes at one another as Trump seeks to change the way that Amazon operates.
Updates On the Tax Issue
Trump and Bezos have notably gone head-to-head on the issue of taxes. Amazon hasn’t been collecting state taxes from all of its sellers, which the government has been frustrated about. Amazon handled the issue on a state-by-state basis, and put some of its sellers in more peril than others by revealing sellers’ information to the government without the sellers’ consent.
Trump has fought Amazon on the tax issue and has threatened to intervene. Mother Jones recently pointed out, however, that Trump himself hasn’t been paying state taxes in every state that his company sells to.
Amazon collects taxes in 45 states, but the Wall Street Journal reported Friday that the president’s own online store—which offers an array of Trump-branded items including Trump wine glasses, baseball caps, and golf accessories—pays local taxes in only two states, Florida and Louisiana. Though the web store claims it is headquartered in Trump Tower in New York City, it doesn’t appear to pay New York state taxes either.
If Trump makes any policy changes for online retailers, they’ll affect everyone. It remains to be seen what he’ll do to directly address Amazon.
There is, however, another Trump vs. Bezos battlefield that could impact sellers down the line.
What’s The Latest On Tariffs?
Trump’s recent comments on Twitter included attacks against Amazon for “costing the United States Post Office massive amounts of money for being their Delivery Boy.” The President also suggested “Amazon should pay these costs (plus) and not have them bourne by the American Taxpayer.”
Trump wants to make businesses in the United States more sustainable by cutting China out of the process. Trump is working on potential tariffs that would impact China, who Trump sees as a major competitor in trade.
However, there is reportedly some dispute among Trump and his team that could stall the process, according to The Washington Post.
Trump’s new inner circle of economic advisers often contradict one another, adding to the confusion. On Friday, Treasury Secretary Steven Mnuchin said there’s “potential” for a trade war, while new National Economic Council Director Larry Kudlow kept stressing that talks were underway and that the standoff was likely to end without tariffs going into effect.
When it comes to Amazon, the China tariffs are one of the biggest things to keep an eye on with regards to Trump’s new economic plans. Even though Trump has noted distaste for Bezos, that’s what a lot of it boils down to.
“A lot of it has to do with China tariffs and what’s going on there,” notes Sean Law, paralegal at Rosenbaum Famularo, P.C., the law firm behind AmazonSellersLawyer.com. “When [Trump] imposes trade tariffs on China, a lot of the people who we deal with are Chinese sellers who are then getting hit by that.”
The Chinese sellers are the most likely Amazon users to be affected by Trump’s proposed trade laws. The company will always remain successful stateside, but there might be some impact for the sellers across the Pacific.
“There’s been tariffs on various things,” Law says. “At the end of the day things are going to get more expensive because of the tariffs. The end client isn’t going to spend as much, so that’s how it’s going to hit the sellers.”
China has some pretty successful sellers and a lot of them sell and distribute products to the United States. So the tariffs will affect not only the sellers there, but also people who work with Chinese-produced items here in the states.
Should We Be Concerned About the Stocks?
Another potential problem for Amazon with regards to Trump is the market’s reaction to his comments. CNN Money reported that Amazon lost as much as $60 million in stock after Trump’s latest fusillade. Dozens of media outlets penned pieces expressing concern over Amazon’s declining stock prices and wondered if Trump really had power over Bezos and his business.
But stocks have actually been on the rise since the beginning of the month and are starting to get back to where they were before Trump’s attacks began in late March. Trump hasn’t stopped his assault of Amazon on Twitter – his most recent tweet involving Amazon came on April 5 – but the stock market seems to have forgotten about it to an extent.
“Personally, I think the stocks falling is reactionary news,” Law says. “It’s already been rising back up last time I checked. Amazon is a business that’s been around for a very long time and they’re a business with a lot of different facets. To see one part of it falling and crashing down is very naive. Jeff Bezos is a very solid businessman who has forged this business from nothing to something; he’s one of the world leaders in this market. It’s not going to crumble overnight. Every other e-commerce platform that sells in the U.S. is going to deal with the same thing.”
That’s not to dismiss the Trump vs. Bezos battle as not being newsworthy; we’ve been seeing major articles drop almost every day from websites such as The Washington Post and The New York Times. The density of articles written on the topic in the last couple of weeks shows that it’s a story people are paying attention to.
Trump has put Amazon squarely in the news cycle with his recent quotes. People will be paying attention to these issues, which could cause motion in some way or another. The tariffs might impact the pricing on items for sellers, which is something to look out for.
“The tariffs, a lot of them, are on raw goods,” Law says. “It affects private label sellers a lot more. He wants to increase the American economy and he believes the way to do that is to encourage more products made and sourced in the U.S. Those sellers who are selling U.S. sourced products are possibly in a better place”
Trump & Bezos Head-to-Head on Tax Issues – Conclusion
There remain a lot of active angles to the Trump story. Don’t pay too much mind into what the stocks say. Amazon, like many companies criticized online by Trump, has already bounced back since its initial drop. People tend to forget these things with the rampant news cycle that we’ve been seeing under Trump’s presidency.
However, there are some angles that deserve the media attention they’ve been getting. Trump and Bezos will continue to argue over the tax issue until Amazon gets that sorted out.
The tariffs – if Trump and his team are able to agree on some new rules to implement – could affect many sellers who deal goods overseas. Both of those things could produce results that affect sellers all over the world.
Anders Jorstad is a content creator for Rosenbaum Famularo, P.C., the law firm behind AmazonSellersLawyer.com. Anders will be earning his degree in journalism from Hofstra and has five years of professional journalism experience. He has written for numerous online and print publications including SB Nation and The Hofstra Chronicle.