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

FILE PHOTO: The logo of Amazon is seen at their new warehouse during its opening announcement on the outskirts of Mexico City, Mexico July 30, 2019. REUTERS/Carlos Jasso

(Reuters) - Inc will need to raise prices in the United States by about 2.1%-2.6% 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% 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 2.1% 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%, BofA said in a note dated Sept. 3.

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

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

Reporting by Shradha Singh in Bengaluru; Editing by Saumyadeb Chakrabarty