will likely to raise prices for the USmarket. By an average of about 2.1% to 2.6% to offset the impact of sanctions imposed by the Trump administration on various Chinese goods, according to estimates by analysts at Bank of America Merrill Lynch.
On Sunday, September 1, the United States began imposing a 15% tariff on various Chinese goods. This includes not only footwear, smartwatches, and televisions, but also other imported goods. This has further intensified the trade tensions between the two countries.
Amazon would have to raise prices in its domestic market by an average of 2.1% to offset the impact. Meanwhile, price increases in other markets would have to be even higher, at 2.6%. At least that is how experts at Bank of America view the situation.
Other American companies will not escape price hikes either. According to analysts, Wayfair, a furniture company popular in the U.S. market, would have to raise the prices of its products by as much as 4.6%.
The crisis has even affected a giant like Amazon
Amazon is headquartered in Washington State, and its history dates back to 1994—a time that, in terms of online retail, could be likened to the “e-commerce Stone Age.” The company started as a small online bookstore, and drawing on this experience, it continues to emphasize e-readers, which remain popular even in the age of smartphones.
Jeff Bezos, the key figure behind the company’s founding, soon managed to turn a small bookstore into a successful company of gigantic proportions. Today, Amazon sells products of all kinds and sizes, available in dozens of countries around the world. The start was truly explosive, as just four years after founding the company, Bezos acquired IMDb (an online movie database) and Alexa.com, a company that collects user statistics to further refine targeted offers. Today, the company generates over $7 billion in annual revenue and ranks among the world’s most valuable brands.
Despite the economic crisis, Amazon continued to grow and gain strength, much like the Amazon River, which inspired its name. Between 2016 and 2018, the company even managed to nearly triple its operating profit from $4.2 billion to $12.3 billion.
The company certainly has no shortage of ideas for innovation in the future. It plans to deploy drones that would deliver goods to customers’ doorsteps within minutes of ordering.