Another day, another tweet by President Donald Trump aimed at Amazon and its delivery deal with the United States Postal Service. Amazon’s stock is down 9 percent in the week since a report from Axios about Trump’s obsession with Amazon kicked off a series of tweets by the president.
Trump keeps bashing Amazon for its Postal Service pact — but he’s overlooking a different controversial deal that gives Chinese merchants an advantage in the U.S.
The reason might rhyme with “Beff Jezos.”
Photo by Chip Somodevilla/Getty Images
Jason Del Rey has been a business journalist for 15 years and has covered Amazon, Walmart, and the e-commerce industry for the last decade. He was a senior correspondent at Vox.
But while Trump continues to harp on this relationship — with questionable claims that we’ll get to in a bit — he continues to overlook a different delivery partnership that can put U.S. merchants at a disadvantage right here in their own country: It’s called ePacket.
The program, designed to boost cross-border trade in the age of online commerce, allows merchants in countries including China to ship small, lightweight goods to the U.S. at very low rates in partnership with the U.S. Postal Service. These sellers also get other perks like delivery tracking at no extra cost.
The program has been a boon to these Chinese businesses as well as the online shopping marketplaces where they hawk their wares, like Wish, eBay and, to a lesser extent, Amazon.
But it has rankled U.S. merchants who have found themselves sometimes paying higher rates to ship items to customers right here in their own country than Chinese merchants are paying to send goods to shoppers on the other side of the globe.
So why is Trump obsessed about one delivery partnership that he says is bad for the U.S. but not the other? One could reasonably speculate it has something to do with Amazon CEO Jeff Bezos and his ownership of one of Trump’s least-favorite media outlets: The Washington Post.
So about that Amazon deal. By law, the Postal Service is not permitted to lose money on delivery deals like Amazon’s. And the regulator who oversees the USPS has determined each year that it does not.
But a separate 2017 study by Citi analysts suggested that the commission that oversees the USPS may be using an outdated method to account for costs and that fees on each Amazon delivery would need to be $1.41 higher in 2018 to make the USPS whole.
That one report has given Trump all he needs to pounce. What it’ll take to get him to turn his attention to the ePacket deal instead is anyone’s guess.
Update: Maybe just a tweet from his 2020 campaign manager, Brad Parscale?
This article originally appeared on Recode.net.
