Amazon may need to raise prices to offset latest tariff blow

Usama Fayyaz September 5, 2019 Inc will need to raise prices in the United States by about 2.1pc-2.6pc 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 15pc tariff on a variety of Chinese goods on Sunday – including footwear, smart watches and flat-panel televisions, intensifying the trade tension between the two countries.

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

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

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

Copyright Reuters, 2019

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