Board Series: The Amazon dilemma – will Bezos do better in Trump 2.0?

• Space Exploration. As the founder of Blue Origin, Bezos is optimistic about the administration’s space agenda. He believes that the government’s support for space initiatives could create opportunities for collaboration and growth in the aerospace sector
• Media Relations. Bezos has taken steps to mitigate past tensions between Trump and The Washington Post, which he owns. By instructing the publication to refrain from endorsing presidential candidates, he maintained a neutral relationship with the administration

Jeff Bezos and Amazon have already taken significant steps to improve their relationship with President Trump and his administration. Bezos’s attendance at Trump’s inauguration and their dinner at Mar-a-Lago signal a willingness to engage directly with the administration.

With Trump’s tariffs and taxes Amazon will win some, lose some

Jeff Bezos’s improved relationship with President Trump’s second administration could offer Amazon advantages, particularly in navigating challenges posed by new tariffs on China and other countries. While these tariffs are expected to increase costs for companies reliant on international supply chains, Amazon’s renewed ties with the administration may help create influence on policies and negotiation. At the same time, Amazon may succeed in achieving tariff exemptions. Exemptions were common during the previous Trump administration and its imposition of tariffs.

Trump’s tariffs on Chinese imports posed challenges for Amazon by increasing costs for goods sold on its platform. However, companies like Temu and Shein exploited a “de minimis” loophole, which allowed low-cost shipments under $800 to enter the U.S. tariff-free, giving them a competitive edge. Trump has vowed to close this loophole, which would level the playing field by subjecting these fast-growing rivals to the same import costs as Amazon sellers. This move would reduce unfair price advantages and could help Amazon regain market share in budget-conscious consumer segments.

Additionally, the administration’s focus on deregulation and tax cuts, as highlighted in recent policies, may create a more favorable business environment for Amazon. These measures could help offset increased costs resulting from tariffs, allowing Amazon to maintain competitive pricing and operational efficiency. Furthermore, Bezos’s optimism about the administration’s space agenda aligns with Amazon’s interests in expanding its technological and logistical capabilities. Collaborations in aerospace and related sectors could open new revenue streams and enhance Amazon’s market position. Bezos’s proactive engagement with the Trump administration positions Amazon to better manage challenges associated with new tariffs and to capitalize on policy shifts that favor large tech enterprises.

Bezos’s playbook beyond Amazon – Lessons from Elon Musk’s White House engagement

Musk’s close involvement with the Trump administration has resulted in significant benefits for his companies. Visa has signed a payments processing agreement with Musk’s social media platform, X, while United Airlines is fast-tracking the integration of Musk’s Starlink satellites for in-flight WiFi. Amazon has sharply increased its ad spending on X, and Apple has updated its iPhone software to support Starlink connectivity. Boeing’s CEO has collaborated with Musk to expedite Air Force One deliveries. Oracle has announced a partnership with Starlink, and Intel has expanded its media relationship with X. The $3 billion debt from Musk’s acquisition of X is gaining appeal among investors, partly because of AI’s high valuation. JPMorgan dropped its lawsuit against Tesla, and CEO Jamie Dimon has publicly praised Musk, highlighting the extent to which companies are eager to cultivate favorable relationships with him due to his influence in the current administration. Furthermore, in space exploration and defense contracts, Bezos has an opportunity to advanced shared goals between the Trump administration and Blue Origin on space defense, commercialization, and exploration.

Key Lessons for Boards from Amazon’s Trump 2.0 Strategy

Board members can learn from Amazon’s evolving relationship with the Trump administration to navigate shifting political and regulatory landscapes:

1. Define long–termism for core business and stay true to course. At the same time as identifying areas of collaboration and re-alignment with the current administration, stay the course on key, long-term initiatives that are core to the business and will drive enterprise value with a 30-year horizon. Avoid the temptation to over-correct  
2. Evaluate areas of highest operational and policy risk with laser focus. Identify areas with greatest risk to current business model to determine mitigants and contingencies, with full scenario mapping of policy directives evolving within the next four years. Be hyper vigilant on operational exposure to a certain country, commodity, policy
3. Remind shareholders and critics of enterprise’s public benefit. Like Musk, Bezos can position his efforts in cloud, AI, space exploration, and accessibility of products for everyday Americans as part of business efforts for “public interest” and continue to build goodwill for his brand (to offset public backlash)
4. Focus government engagement on narrow topics. In support of long-term approach, proactively engage policymakers on material risks to core business to mitigate risks and maintain open dialogue, even after past tensions
5. Push for trade agility and consistent policy monitoring. With unclear direction on tariffs and trade with key trading partners for U.S. businesses, all those with global exposure need to assess the most critical points for diversification. Start with assessing vulnerabilities, collaborate with regulators to minimize disruptions, re-evaluate China+1 program and nearshoring
6. Find specific areas of shared priorities with administration and industry peers. Identify opportunities to align with government priorities, such as infrastructure, reshoring, or technology initiatives and focus no-regret business operations accordingly. Engage in pre-competitive cooperation with industry peers to influence standards and regulation on high-priority topics
7. Embrace “wait and see” diplomacy on secondary issues. Shift from confrontational to diplomatic approaches when necessary to maintain business stability and reduce risk to core business, keep “wait and see” mindset where non-material issues arise

By applying these lessons, boards can better navigate political complexities and ensure long-term stability. The next four years will require aggressive monitoring, consistency, and focus on the core to ensure value creation for shareholders.