Amazon may need to raise prices to offset latest tariff blow: Analysts

green and white leafed plantsSEATTLE: Amazon will need to raise prices in the United States by about 2.1 per cent to 2.6 per cent on average to offset the impact of fresh tariffs slapped by the Trump administration on various Chinese goods, Bank of America Merrill Lynch analysts estimated.

The United States began imposing 15 per cent tariff on a variety of Chinese goods on Sunday (Sep 1) – including footwear, smart watches and flat-panel televisions, intensifying the trade tension between the two countries.



Amazon would need to increase prices by 2.1 per cent on average in its first party marketplace to offset the impact, while for third party marketplace average prices would have to go up by 2.6 per cent, BofA said in a note dated Sep 3.

The brokerage estimates online furniture retailer Wayfair Inc will also need to hike average prices by 4.6 per cent.

BofA continues to rate Amazon “buy” and Wayfair “neutral”.

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