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THE INC. LIFE

Trump’s Investigation of the Postal Service Could Affect More Than Just Amazon

The president called for an evaluation of the agency’s financial dealings, a move that may portend an increase in shipping costs for businesses.

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BY Yasmin Gagne - 13 Apr 2018

PHOTO CREDIT: Getty Images

President Trump issued an executive order on Thursday calling for an assessment of the U.S. Postal Service's finances. The order creates a task force to examine the "unsustainable path" of the agency--a development that could potentially affect costs for businesses that rely heavily on U.S.P.S. to ship their products.

While Trump did not mention Amazon in the order, his demands come soon after he accused the company of not paying enough postage. The task force likely will be encouraged to see if U.S.P.S. could charge Amazon and other companies more for parcel delivery, according to Reuters.

Trump reportedly is seeking to substantiate claims that the Postal Service loses money from its dealings with Amazon, its biggest shipper of packages. Experts and Trump's own advisers have encouraged the president to walk back his accusations and demands to investigate parts of the postal service that directly involve Amazon's business, saying that Amazon is helping U.S.P.S. stay afloat, The New York Times reports.

The Postal Service has been in dire financial straits for a decade due to a decline in marketing mail and first-class mail, according to the Times. A study by Citigroup last year found U.S.P.S. was charging below market rates, estimating that if the agency raised delivery rates Amazon's shipping costs would rise by around $2.6 billion.

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