President Donald Trump personally asked the U.S. Postmaster General Megan Brennan to double shipping rates for Amazon and some other companies — and some financial experts worry Amazon may pass the costs along to consumers.
Postmaster Brennan has refused to comply with the president’s requests, The Washington Post reported this week, saying that the United States Postal Service’s agreements with Amazon and other companies are bound by contracts and only subject to review by the appropriate regulatory agencies. Brennan further stated that Amazon’s relationship with the USPS was a profitable one for the mail carrier.
Despite Brennan’s reassurances, President Trump recently signed an executive order ordering a review of the postal service. It’s possible that this review could result in changes regarding how much Amazon and other companies are charged for package deliveries. And according to a recent analysis by Credit Suisse, the online shopping giant could offset the increased cost of shipping with a $20 hike in annual Prime subscription fees.
Brennan and Trump have discussed the matter of the USPS’s relationship with Amazon several times since the real estate mogul took office in 2017. The most recent meeting occurred about four months ago. In addition to these meetings with Brennan, Trump and three of his key advisers have also discussed this matter. The Post’s sources indicate that Trump’s advisers are split on the matter of Amazon: Some believe Amazon is being subsidized by the postal service, while others argue that the arrangement is beneficial to the USPS.
The details of these meetings haven’t been revealed; we know that they have included Treasury Secretary Steven Mnuchin, former National Economic Council Director Gary Cohn, and Domestic Policy Council Director Andrew Bremberg. Prior to his departure in March, Cohn was one of Amazon’s biggest defenders in the Trump administration.
Despite Amazon and the postal services’ assurances that USPS makes money off of Amazon, Trump appears unconvinced.
“I am right about Amazon costing the United States Post Office massive amounts of money for being their Delivery Boy,” the president tweeted on April 3. “Amazon should pay these costs (plus) and not have them bourne by the American Taxpayer. Many billions of dollars. P.O. leaders don’t have a clue (or do they?)!”
Trump’s executive order could result in changes regarding how much USPS charges Amazon. This could, in theory, mean higher prices for Amazon customers — who just saw Amazon raise Prime costs by $20. Is another hike on the horizon?
