Tariffs and Impact

• Democratic lawmakers are calling on the FTC to investigate reports of price-gouging falsely blamed on Trump tariffs.
• Prices that are raised in anticipation of tariffs should be lowered if the tariffs are rescinded, they said.
• The FTC has not yet responded to a letter from the lawmakers, they said. 

Senator Elizabeth Warren (D-Mass.) and other Democratic lawmakers are urging Federal Trade Commission Chair Andrew Ferguson to investigate tariff-enabled corporate price gouging that is raising costs for American families and use its full authority to prevent it.

The lawmakers previously wrote to the FTC warning that large companies could take advantage of the Trump Administration’s chaotic tariff strategy to price gouge consumers.

That letter noted that the on-again, off-again tariff confusion and uncertainty has created a cover for large corporations to raise prices on all goods, regardless of whether they are actually subject to new tariffs, and increase prices above and beyond what is necessary to cover any additional costs.

Ferguson did not respond to the lawmakers’ letter and has yet to take discernible action to prevent tariff-related price gouging, despite his own warning that President Trump’s tariffs “should not be interpreted as a green light for price fixing or any other unlawful behavior,” the lawmakers said.

In June, the Federal Reserve Bank of New York released new survey results showing that “a significant share” of companies raised prices of goods and services that are not subject to tariffs, confirming that businesses were indeed “taking advantage of an escalating pricing environment to increase prices.”

Already a "significant concern"

Anecdotes from the Federal Reserve illustrate that tariff-enabled price gouging is already a significant and legitimate concern:

• A heavy construction equipment supplier “raised prices on goods unaffected by tariffs to enjoy the extra margin.” 
• A contact at the Federal Reserve Bank of San Francisco “observed that price increases that had been implemented in anticipation of certain tariffs were not rolled back once those tariffs were removed.”
• The President of the Federal Reserve Bank of Cleveland said she heard of firms “raising prices even though they aren’t affected by tariffs because competitors who do face higher import taxes are raising prices.”  

“This Administration’s reckless approach is spiking costs for small businesses and creating opportunities for billion-dollar companies to grow their profits and take advantage of consumers,” the lawmakers wrote. “The FTC should be utilizing its full authority to prevent these unfair practices.”

FTC urged to take action

The lawmakers concluded the letter by urging the FTC to use its 6(b) authority to investigate any tariff-enabled price gouging and to issue a report on its findings.

Warren has previously criticized corporations for unfairly increasing prices for consumers: 

• In May 2025, Warren demanded the Federal Trade Commission investigate which large companies are using the Trump Administration’s tariff policies – and the confusion surrounding them – as an excuse to raise prices in excess of actual cost increases and to prosecute individuals and companies that price gouge American consumers.
• In May 2025, Warren wrote to Ramon Laguarta, CEO of PepsiCo, Inc. (Pepsi), demanding an explanation for the company’s potentially illegal price discrimination against small and independent grocery stores.
• On February 28, 2024, Warren joined Senator Bob Casey (D-Pa.) in introducing the Shrinkflation Prevention Act to crack down on corporations that deceive consumers by selling smaller sizes of their products without lowering prices.
• On February 15, 2024, Senators Warren, Baldwin, Casey, and U.S. Representative Jan Schakowsky (D-Ill.) reintroduced the Price Gouging Prevention Act of 2024, which would protect consumers and prohibit corporate price gouging by authorizing the FTC and state attorneys general to enforce a federal ban against grossly excessive price increases.