Amazon: how to fight back Trump’s tax attack (in Twitter)?

President Trump tweets about Amazon taxes on Thursday, accusing Amazon of paying “little or no taxes to state & local governments,” and having a detrimental effect on the U.S. economy.

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But Trump’s criticism of Amazon is not based in fact.

1. Taxes

Amazon collects sales tax in every state that charges one and remits it to the states -- and that's virtually every state.

Years ago, when Amazon had few warehouses, it was able to get a competitive advantage by not charging sales tax. When retailers ship goods to states where they don't have a physical presence, they do not have to charge sales tax.

But Amazon has been adding to its national network of distribution centers, and last year it announced it would start charging sales tax in every state, whether it has a physical presence there or not.

Amazon also pays local property taxes on its distribution centers as well as on the Whole Foods stores it purchased last year.

The company has not disclosed how much its customers pay in sales taxes, but it is considerable. Its North American sales came to $106 billion last year, suggesting that it collects billions in sales taxes for various states.

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The president is correct that Amazon does not always collect city and local sales taxes, according to analysis earlier this week by the Institute on Taxation and Economic Policy. And it also does not collect sales taxes on purchases made on Amazon from third-party vendors. Third-party vendors had sales of $32 billion on Amazon in 2017, although some of those sales were outside of North America.

2. Postal Service

Amazon pays the post office to deliver packages to customers' doors.

Because Amazon ships so many packages though the post office, it pays a lower rate than most customers. But Amazon doesn't get a special rate — it pays the rate that the post office charges other bulk shippers.

Amazon also has a special agreement with the Postal Service to deliver packages on Sundays. Neither Amazon nor the post office has disclosed the details of its agreement, but the Postal Service says it's mutually beneficial. Amazon effectively helps the Postal Service spread its costs over a seven-day week.

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The Postal Service is losing money. But it's not Amazon's fault: Citigroup last year reported that the average parcel rate would need to increase by about 50% for the Postal Service to break even. The Postal Service's biggest money problem is that it has billions in retirement obligations to its workers that it can't afford.

3. Retail

Strong currents are pushing traditional stores to the brink.

It is clearly true that consumers' shift to e-commerce companies like Amazon has forced many traditional retailers to close stores. But other megastores like Walmart (WMT) share much of the blame for that.

Amazon says that it actually helps small companies succeed in the difficult retail climate. For example, it allows small businesses to sell their products to a mass audience when they otherwise wouldn't be able to achieve global scale.

Now, question is what will Amazon do to fight back.

Until now, people has been calm and level-headed towards Trump’s tweets, but if Trump accuses more, things may get ugly and spin out of control. We’ll just have to wait and see.

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How did U.S. citizens react to tariffs on Chinese imports?

Are Americans happy with the Trump’s possible tariffs on Chinese imports in an effort to address trade imbalance between the U.S. and China?

Not everyone is happy, in fact many are worried that this could result in a backfire that would hurt America in the long run.

The U.S. government's latest plan to impose huge tariffs on imports from China is like palliative that does not solve the problem in the long run, said a U.S. scholar on economics and trade.

U.S. President Donald Trump on Thursday signed a memorandum that could impose tariffs on up to 60 billion U.S. dollars of imports from China and restrictions on Chinese investment in the United States.

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Khairy Tourk, a professor with the Stuart School of Business of the Illinois Institute of Technology, said the Trump administration's decision to restrict Chinese investment would be restrictions for new jobs created in the United States.

"President Trump is calling for creating more jobs here, but now the action would work against his policy. So this is really negatively developed." Tourk told Xinhua in a recent interview.

Tourk believes the main issue is not tariff but the natural technology transfer, "many people here claim China is stealing American technology so they want to put restrictions on Chinese investment, that is definitely wrong."

On the other hand, Tourk said the U.S. government believes that tariff is a useful tool to bring balance in the United States and China trade relationship, but it is not the main cause, "We in the U.S are not saving enough, so we have to import resources and products achieving from overseas; this is the truth."

Tourk holds that policy makers here are lack of long term vision. "The best way to improve the American economy is to increase productivity, but this takes a lot of time, so it is easy for politicians to take some palliative (actions), but it does not heal the real cause of the problem."

China is undoubtedly one the largest export economies in the world and has earned the name of “world factory” for itself. Other than the quality and price of the products, one important element leading to the phenomenon here is also the government support.

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US retailers urge Trump not to levy tariffs on Chinese imports

A group of 25 major U.S. retail companies, including Walmart, Costco and Best Buy, on Monday urged the Donald Trump administration not to impose sweeping tariffs on Chinese imports.

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"We are concerned about the negative impact" that "could have on America's working families," "as you consider remedial actions under Section 301 of the Trade Act," the retailers said in a letter to U.S. President Donald Trump, referring to the administration's ongoing unilateral investigation about China's trade policies and practices.

"Yet were this investigation to result in a broadly applied tariff remedy on imports from China, it would hurt American households with higher prices and exacerbate a U.S. tariff system that is already stacked against working families," the letter said.

The retail group noted that those working families who can afford less have already paid more in the United States because the country levies "the highest tariffs" on basic consumer goods.

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"Applying any additional broad-based tariff as part of a Section 301 action would worsen this inequity and punish American working families with higher prices on household basics like clothing, shoes, electronics, and home goods," they argued.

The letter came after the Trump administration was reportedly considering tariffs on 30-60 billion U.S. dollars of annual Chinese imports for China's alleged "unfair trade practices."

It was the latest example of growing dissent from U.S. business groups against the Trump administration's protectionist trade policy.

Forty-five U.S. trade associations, representing retail, technology, agriculture and other consumer-product industries, on Sunday also urged the Trump administration not to move forward its tariff plan on Chinese imports, as it would hurt U.S. consumers and companies.

Chinese Foreign Ministry spokesman Lu Kang said Thursday that China hoped to address bilateral trade issues with the United States in a constructive manner and by making a bigger "cake" of cooperation.

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"The two sides have properly resolved their trade differences in a constructive manner over the past 40 years. We believe the two countries can still settle their disputes through friendly negotiations, and we are ready to do so," the spokesman said.

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China: we don’t want a trade war with U.S.

U.S. President Donald Trump announced a plan to impose tariffs of 25% on steel imports and 10% on imported aluminum. After that, a senior Chinese diplomat said on Sunday that China does not want a trade war with the United States but will defend its interests.

Trump struck a defiant tone on Friday, saying trade wars were good and easy to win, a day after he said he intended to put duties of 25% on steel imports and 10% on aluminum products.

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Trade tensions between the world’s two largest economies have risen since Trump took office in 2017, and although China only accounts for a small fraction of U.S. steel imports, its massive industry expansion has helped produce a global glut of steel that has driven down prices.

Negotiations and mutual opening of markets were the best ways to resolve trade friction, Chinese Vice Foreign Minister Zhang Yesui said at a briefing ahead of China’s annual session of parliament, which opens this week.

“China does not want to fight a trade war with the United States, but we absolutely will not sit by and watch as China’s interests are damaged,” said Zhang, who is a spokesman for parliament and was formerly an ambassador to the United States.

“If policies are made on the basis of mistaken judgments or assumptions, it will damage bilateral relations and bring about consequences that neither country wants to see.” he said.

Trump believes the tariffs will safeguard American jobs, but many economists say the impact of price increases for users of steel and aluminum, such as the auto and oil industries, will destroy more jobs than curbs on imports create.

Nonetheless, there is growing bipartisan consensus in Washington, and support within the U.S. business community, for the U.S. government to counter what are seen as Beijing’s predatory industrial policies and market restrictions on foreign firms.

Trump has long sought a way to a more balanced trade relationship with China and is also considering potential trade sanctions against Beijing under a “Section 301” investigations into China’s intellectual property practices and pressure on foreign companies for technology transfers.

His administration has said the United States mistakenly supported China’s membership in the World Trade Organization in 2001 on terms that have failed to force Beijing to open its economy.

Diplomatic and U.S. business sources say the United States has all but frozen a formal mechanism for talks on commercial disputes with China because it is not satisfied that Beijing has met its promises to ease market restrictions.

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What can Asian suppliers do over Trump's tariff plans?

What is the trend of future steel and aluminum prices? As we all know, the prices will be affected by some countries’ economic policy, such as Trump’s plan. Asia now fears trade war after Trump plans hefty steel, aluminum tariffs.

Donald Trump’s planned tariffs on steel and aluminum will distort global trade and cost jobs, said Australia’s trade minister on Friday, highlighting the risk of retaliatory measures as Asian exporters sought more detail on the plans.

Fears of an escalating trade war hit the share prices of Asian steelmakers and manufacturers supplying U.S. markets particularly hard on Friday following a rough night on Wall Street.

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Trump said the duties of 25 percent on steel and 10 percent on aluminum would be formally announced next week, although White House officials later said some details still needed to be ironed out.

Australia, which has championed the free-trade Trans Pacific Partnership that Trump pulled the United States out of, has sought an exemption for its steel and aluminum to the United States, Ciobo added.

Steel has become key focus for Trump, who pledged to restore the U.S. industry and punish what he sees as unfair trade practices, particularly by China.

Although China only accounts for 2 percent of U.S. steel imports, its massive industry expansion has helped produce a global glut of steel that has driven down prices.

South Korea, the third-largest steel exporter to the United States after Canada and Brazil, said it will keep talking to U.S. officials until Washington’s plans for tariffs are finalised.

South Korean trade minister Kim Hyun-chong has been in the United States since Feb. 25, the trade ministry said. Kim has met U.S. Commerce Secretary Wilbur Ross and other officials to raise concerns over the so-called Section 232 probe and consider a plan that would minimize the damage to South Korean companies.

NATIONAL SECURITY?

Asian steelmakers fear U.S. tariffs could result in their domestic markets becoming flooded with steel products that have nowhere else to go.

“We are concerned about how other exporters react, what will happen with steel that cannot be sold to the U.S.,” Vikrom Wacharakrup, Chairman of Iron and Steel Industry Group, Federation of Thai Industries, told Reuters. Thailand exports steel mainly to Asia but also to the United States.

The Trump administration also cited national security interests for its action, saying the United States needs domestic supplies for its tanks and warships.

Contrary to the action announced by Trump on Thursday, the Department of Defense had recommended targeted steel tariffs and a delay in aluminum duties.

“We continue to seek clarification,” said Japanese Trade and Industry Minister Hiroshige Seko.“I don’t think exports of steel and aluminum from Japan, which is a U.S. ally, damages U.S. national security in any way, and we would like to explain that to the U.S.”

India also raised concerns about the use of the national security interests provisions.

Trump believes the tariffs will safeguard American jobs but many economists say the impact of price increases for consumers of steel and aluminum, such as the auto and oil industries, will be to destroy more jobs than they create.

Japan’s Toyota Motor Corp said the tariffs would substantially raise costs and therefore prices of cars and trucks sold in America.

News of the tariffs hit sentiment on Wall Street due to the potential impact of higher costs on consumers and the potential for damaging tit-for-tat retaliation by affected countries.

Asian steelmakers suffered with shares in South Korea’s POSCO and Japan’s Nippon Steel & Sumitomo Metal Corp down by more than 3 percent.

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