Dems Demand Probe of Companies Using Trump Tariffs as 'Excuse to Price Gouge'
"The new tariffs have created a cloud of uncertainty that gives companies cover to raise prices on all goods," the lawmakers wrote.
Dozens of congressional Democrats are urging the country's top antitrust enforcer to probe the extent to which big companies are taking advantage of Trump administration tariffs, or confusion around the tariffs, to boost prices, and to take action against any that are inappropriately raising prices in excess of cost increases, also known as price gouging.
In a letter sent last week, 36 Democrats asked Republican Federal Trade Commission (FTC) Chair Andrew Ferguson to answer questions about his decision to effectively shut down an inquiry into so-called "surveillance pricing" practices—a move that, according to the outlet The Lever, has emboldened consultants who peddle surveillance pricing tools to advise companies on how to hike prices in response to tariffs, or even just the threat of tariffs.
Surveillance pricing refers to a practice when companies collect personal information like location or browsing history to set different prices for specific consumers for the same goods with the aim of generating more profit.
In January, the FTC released the initial findings of a surveillance pricing market study, and then opened up a public comment period for consumers and businesses around surveillance pricing. But the FTC under Ferguson, who replaced former Chair Lina Khan in January, shut down the comment period, which was supposed to run through mid-April.
"The message that is coming out of this administration… is that the watchdog is gone and companies feel emboldened to rip people off," a former FTC official told The Lever.
"President [Donald] Trump's on-again, off-again tariffs build an especially fertile environment for price gouging," the letter states. "The new tariffs have created a cloud of uncertainty that gives companies cover to raise prices on all goods, regardless of whether they are subject to new tariffs or whether their costs have meaningfully increased, above and beyond what is necessary to cover any cost increases."
Sens. Ruben Gallego (D-Ariz.), Sheldon Whitehouse (D-R.I.), Elizabeth Warren (D-Mass.), Cory Booker (D-N.J.), and Rep. Rosa DeLauro (D-Conn.) led their colleagues on the letter. A statement from Gallego's office last week framed the letter as a demand to "prevent corporations from using Trump's reckless tariffs as an excuse to price gouge hardworking Americans."
The Trump administration has imposed 10% baseline tariffs and imposed higher duties on goods coming from China. Last week, the Trump administration and China agreed to lower the tariffs they had imposed on one another. China will now be subject to a 30% tariff, whereas before many goods coming to the U.S. from China previously had at least a 145% tariff. Negotiations with other countries are ongoing.
Citing The Lever's reporting, the Democratic lawmakers are urging Ferguson to use his authority under Section 6(b) of the Federal Trade Commission Act to compel big companies to report their costs and retail and wholesale prices dating back to the day after Trump was elected in November, and also to report how much tariffs have increased their costs. The group is urging the FTC to use its power to investigate and prosecute companies who are engaging in "unfair or deceptive acts" regarding commerce.
The Democrats are also demanding answers, by May 30, to a number of questions around the end of the inquiry into surveillance pricing practices, such as why Ferguson chose to close the forum for public comments early, and whether he met with any of the businesses subject to the inquiry in advance of the termination of the public comment.
The Lever reported that some large companies who were subject to the inquiry gave money to Trump's inauguration fund.
Common Dreams as reached out to the FTC and Gallego's office for comment.
