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Trump threatened 'such problems' for Amazon, but Jeff Bezos has little to worry about

Try to buy signature men's wear from Donald Trump's corporate website, and you'll be directed to Amazon.com, where a navy blue necktie will cost you $29.99 and a cashmere blue coat runs close to $110.

It's the same Amazon that Trump harshly criticized during his campaign, saying it operated a monopoly with an unfair tax shelter that's somehow propped up by CEO Jeff Bezos's ownership of The Washington Post.

"Believe me, if I become president, oh do they have problems," Trump said at a rally in February. "They're going to have such problems."

Much of his anger was directed at the Post, which assigned at least 20 reporters to investigate his life during the campaign and published particularly damaging stories about his philanthropy, or lack thereof.

But what kind of problems could a Trump presidency actually inflict on Amazon, the site that's the default marketplace for his branded men's dresswear.


Nothing in the president-elect's proposed tax policy would hurt Amazon. In fact, quite the opposite is true.

The business tax rate would be reduced to 15 percent from 35 percent today, which would likely bolster Amazon's net income now that the company actually makes money. As for sales tax, Amazon collects it on items shipped to the 29 states and the District of Columbia where it's required.

Meanwhile, any connection that Trump tries to make between Amazon's business and the Post's influence ranges from conjecture to nonsense, like when the president-elect suggested that Bezos uses the newspaper's losses as a way to lower taxes paid by Amazon.

Bezos bought the newspaper in 2013, more than 16 years after Amazon's IPO. The e-retailer has operated at either a loss or at near breakeven from the beginning.

Amazon shares

"We see this as a defensive, reactionary tactic, where Trump used a mirage of attack points to attempt to implicate Jeff Bezos and, by extension, the credibility of The Washington Post investigation," Gene Munster, an analyst at Piper Jaffray, wrote in last week. "We do not believe that the mechanics are in place for Trump to impact Amazon."

Munster, who recommends buying Amazon shares, doesn't see any potential antitrust violations because the company controls only about 5 percent of U.S. retail sales.

Still, Amazon shares sank for four straight days after the election, before recouping much of their losses. The stock is down 3.5 percent since Election Day, closing at $760.16 on Friday.

There are broader issues of potential concern to Amazon and its investors.

For one, Trump's proposals on immigration and foreign worker admissions could turn away H-1B visa candidates, who depend on employment to stay in the country, or even make the U.S. a less-desirable place to work given the political setting. Amazon, like all big tech companies, hires engineers and developers from around the world.

And, of course, there's the macroeconomic environment.

About 70 percent of Amazon's $107 billion in 2015 revenue was tied to commerce. Trump's views on trade and his threat to place a 45 percent tariff on goods from China may be entirely unrealistic, but any added barriers could harm Amazon. An increasing number of products on the marketplace are sold by foreign companies, and the relative free flow of goods enables Amazon to keep down prices.

But while retail accounts for the vast majority of revenue, all of the profit is coming from Amazon Web Services, the company's cloud-computing division. In the third quarter, AWS generated operating income of $861 million, while income for all of Amazon was $575 million.

With retail and computing, Amazon is building its market share and lowering costs for businesses and consumers. Longtime tech investor Roger McNamee said that even in a down economy, Amazon will flourish because it can grab business from competitors with less scale.

"I view Amazon as a democratizing force in the economy, both in retail and in software," said McNamee, adding that Amazon is the only stock he's bought since the election. "In any scenario, and especially one where the economy is shrinking, Amazon will be one of the last companies standing."

None of that's to say that Amazon won't have some problems with a potentially acrimonious administration. Munster said an investigation, should Trump launch one, would have the potential to "swing U.S. opinion."

Bezos wasn't shy about his anti-Trump views during the election, at one point tweeting that he'd save a seat for him on his Blue Origin spacecraft and later criticizing his attempts to intimidate the press.

Elsewhere within Amazon, executives were getting across a message that became quite familiar in the election's aftermath. Don Katz, CEO of Amazon's Audible audiobook division, wrote a memo to employees to try to boost their spirits.

Katz touted Audible's decision in 2007 to move the company to Newark, New Jersey, and help the city rebound by investing in education and job growth. While the overall tone was uplifting, Katz was clearly addressing the elephant in the room. Here was his message to anyone who felt at risk following the results:

"As a company we will not tolerate a sensibility internally that diminishes anyone who works here because of who he or she is — from where someone comes from to who someone chooses to love — and we will also stand behind any employee whose civil rights or dignity is challenged from outside Audible any way we can."