Tech’s top executives — including Amazon’s Jeff Bezos — are expected to meet President-elect Donald Trump today, beginning what could be a delicate, four-year-long dance as two very different world views collide.
A simmering animosity between the now-president-elect and the e-commerce king came into the spotlight a year ago, when Trump fired off a string of tweets aimed at the Bezos-owned Washington Post, calling it a “scam” that was meant to be a tax shelter for the “no-profit Amazon.”
Just how this history might weigh on Amazon now that Trump is headed to the Oval Office remains to be seen.
“It’s not clear in those comments that Trump even understands that it’s not Amazon that owns The Washington Post — it’s Jeff Bezos — so I don’t think it’s relevant,” said Roe Equity Research analyst Laura Champine. She said that although Trump hinted that he would look at Amazon for anti-trust issues, that argument seemed “nonsensical,” mainly because there are so many competitors in the world of e-commerce.
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“If anything, what seems most likely is that Trump will lower tax rates for corporations and that obviously will benefit Amazon,” Champine said.
Amazon is creating jobs in the United States, so in that way it doesn’t make sense for Trump to go after Bezos, whose net worth is estimated to be more than $65 billion. The more obvious conflict at the meeting, she said, was likely to be with Apple, which imports out of China. (Apple’s Tim Cook is expected to attend, but neither Apple nor Amazon responded to requests to confirm attendance.)
Trump has said he will reform immigration policies and build a wall between the U.S. and Mexico, renegotiate existing trade deals, impose steep tariffs on Chinese imports and cut corporate taxes.
Forrester analyst Andrew Bartels predicted that if Trump carried through with plans to withdraw from NAFTA and impose tariffs on China, large U.S. manufacturers and retailers will have to make changes in their supply chains, and manufacturers will face increased trade barriers for their exports. Forrester estimates that in the U.S., spending on technology from the retail sector would reach $100 million in 2017, which would be up 4.5 percent from 2016 estimates. Forrester researchers reported that uncertainties surrounding the president-elect’s policies will see total U.S. tech spending grow by 4.3 percent overall in 2017 until the full effects are realized in 2018.
Bartels said he didn’t think the singling out of Bezos on Twitter would be a “big deal” for Amazon’s business. While Bartels didn’t think that Trump would have an impact on Amazon’s retail business, as it’s not particularly susceptible to issues around immigration or trade, he did see it as a potential issue for Amazon Web Services, which provides cloud computing services and earned about $11 billion in revenue in the past four quarters.
Bartels said that as the U.S. government is a significant client of AWS, there could be a potential impact if Trump wanted to “retaliate,” although he saw the possibility as highly unlikely.
“I don’t think Trump understands that business or knows what it is,” Bartels said. “I am not sure that he would even do anything about it because it is so far removed from the things he cares about.”
Bartels added that the tech sector as a whole was not supportive of Trump, so there may be some efforts to retaliate or to put pressure on companies to bring manufacturing back and to stop using Asian supply chains.
“There’s a lot of ill will between the tech sector and Trump,” Bartels said. “He is in real estate, and he doesn’t understand tech other than Twitter. I suspect the meeting won’t be terribly productive, other than some cosmetics about working well together, and hopefully it will tone down hostility.”