PARIS, May 28 (Reuters) - French luxury group LVMH

has room to raise prices of high-end products by

around 2-3% without likely affecting demand from luxury clients,

but it would be difficult to lift prices of cognac or beauty

products, company executives said on Wednesday.

"We can increase prices by 2% to 3% per year," deputy CEO

Stephane Bianchi told members of the French parliament in a

hearing on Wednesday, when asked about his group's ability to

offset potential tariffs.

Citing the example of high jewellery, Bianchi said buyers of

the group's most expensive products would absorb such price

hikes, but cautioned that "this does not mean the (price)

elasticity is infinite".

U.S. President Donald Trump this week backed away from his

threat to impose 50% tariffs on imports from the European Union

next month, restoring a July 9 deadline to allow for talks

between Washington and the 27-nation bloc to produce a deal.

Raising the prices of lower-priced beauty products and

cognac would be more complicated, added finance chief Cecile

Cabanis, saying "the capacity to raise prices is not there".

LVMH executives said they still plan to continue investing

in China, although they had noticed that Chinese consumers have

been travelling and spending less over the past three months.

Demand in the United States, however, showed the first signs

of a rebound, but as long as trade tensions with the European

Union over threatened tariffs are not being eased, the climate

will remain difficult, said Bianchi.