The Reason Trump Is Threatening to Hold Post Office Aid Hostage

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By Emiene Wright

April 27, 2020

“The Postal Service is a joke,” Trump told reporters Friday. “If they don’t raise the price I’m not signing anything.”

The United States Postal Service is in dire need of a Congress-approved emergency loan, but President Trump said he would block the deal unless the agency agrees to hike their shipping rates for online retailers by as much as 400%.

Congress included $10 billion in loans to the USPS in the $2 trillion coronavirus relief package passed last month, but Trump has seized on the loan as leverage to implement drastic changes that would hurt the organization, as well as his perceived foe Jeff Bezos. The postal service receives no federal or taxpayer funding, running entirely on the purchase of postage, goods, and services.  

“The Postal Service is a joke,” Trump told reporters Friday. “If they don’t raise the price I’m not signing anything.” 

Anonymous sources told the Washington Post that the ultimatum has roots in Trump’s longstanding feud with Amazon owner Jeff Bezos, who also owns the Washington Post. The president has publicly singled out the Pulitzer Prize-winning newspaper for coverage he feels is unflattering, and has attacked the USPS as Amazon’s “delivery boy,” going so far as to order a governmental review of the USPS’s finances in 2018. 

Package delivery makes up just 5% of the Postal Service’s volume but about 30% of its revenue. That figure skyrocketed to 53% last week as Americans leaned on e-commerce for groceries, prescriptions, and household essentials, but losses in other areas since the pandemic have cut total revenue by about a third. Critics say an abrupt hike in shipping prices would gut the USPS, Amazon, and many more besides.

RELATED: 13 Groups of People Who Will Be Crushed If Trump Doesn’t Save the Postal Service

The U.S. Postal Service has 157 million delivery points, reaching 42,000 zip codes in the U.S. with more than half of them in rural areas. Jon Gold, vice president of supply chain for the National Retail Federation, told the Washington Post that higher prices would “significantly hurt rural communities and small businesses in addition to USPS.”

“Retailers and consumers are heavily relying on USPS during the pandemic to deliver goods, as bricks-and-mortar stores are temporarily closed,” Gold said.

“This is about as catastrophically stupid an idea that anyone could ever imagine,” Columbia University Business School’s Mark Cohen, director of retail studies, told the Post. “As if anyone from Amazon to the local mom and pop delivery businesses would ever put up with a rate increase like that when they have alternatives” such as UPS and FedEx.

“Raising rates like that on the post office, which is a thinly veiled attempt to get at Bezos, will merely result in Amazon and other shippers moving their business,” he continued. “It will kill the post office.”




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