Many large corporations have already announced price hikes, even before tariffs take effect
Washington, D.C. – Last week, Senators Sheldon Whitehouse (D-RI), Ruben Gallego (D-AZ), Elizabeth Warren (D-MA), and Cory Booker (D-NJ), and Representative Rosa DeLauro (D-CT) led 31 of their Senate and House colleagues in demanding the Federal Trade Commission (FTC) 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.
“President Trump’s on-again, off-again tariffs build an especially fertile environment for price-gouging. 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,” the members wrote.
“While small businesses operating on thin profit margins will be forced to pass on many costs to stay afloat, the chaotic and sweeping nature of President Trump’s tariffs is especially conducive to price gouging by large companies with significant market power […] Even if President Trump decides to reduce or eliminate tariffs, companies may nonetheless decide to maintain higher prices—or raise them even further, claiming ‘market uncertainty,’” added the members.
President Trump’s indiscriminate tariff policies and chaotic implementation have created instability for business owners and American consumers. While small businesses have no choice but to pass rising supply costs onto customers, giant corporations have more leeway on their balance sheet to withstand increased costs, can force their suppliers to bear some of the tariff costs, and can wield significant political pressure to lobby for carve-outs for their business.
Even though President Trump has temporarily paused many of the most drastic tariffs he threatened to impose on “liberation day,” businesses have already raised prices in response to the announced tariffs, and are unlikely to lower them. As Federal Reserve Chair Powell explained last month, manufacturers may even raise prices on non-tariffed goods to “follow the crowd” and increase their profits.
To prevent this type of corporate price gouging at the expense of working families, the members urge FTC Chair Ferguson to fulfill his public commitment and to ensure President Trump’s trade war is not a “green light” for price gouging by:
- Using his authority under Section 6(b) of the Federal Trade Commission Act to require large companies to report their costs and retail and wholesale prices since November 6, 2024 and the extent to which tariffs have increased their costs.
- Using his authority under Section 5 of the Federal Trade Commission Act to investigate and prosecute companies engaging in “unfair or deceptive acts or practices in or affecting commerce.”
The members also criticized Chair Ferguson’s decision to abruptly close an FTC investigation into corporations using Americans’ personal information to tailor their pricing and gouge individual consumers. The tactic, known as “surveillance pricing,” is used by corporations to target consumers with increased prices based on their location and browsing history.
“Armed with the knowledge that the FTC has turned a blind eye to this price-gouging tactic, companies now have free rein to use surveillance pricing to price gouge consumers. A former FTC official said, ‘The message that is coming out of this administration…is that the watchdog is gone and companies feel emboldened to rip people off.’ We urge you to fulfill your public commitment and to ensure President Trump’s trade war is not a ‘green light’ for price gouging,” concluded the members in the letter.
Whitehouse has helped lead the charge in the Senate to fight back against corporate price gouging. Whitehouse introduced the Big Oil Windfall Profits Tax in March 2022 as Big Oil jacked up gas prices against the backdrop of the Russian invasion of Ukraine. OPEC increased prices after the invasion and U.S. oil producers followed suit, raking in massive profits.
The text of the letter is below and a PDF is available here.
May 14, 2025
The Honorable Andrew Ferguson
Chair
Federal Trade Commission
600 Pennsylvania Avenue, NW
Washington, DC 20580
Dear Chair Ferguson,
We urge you to investigate the extent to 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. Despite your public commitment to ensure the tariffs are not a “green light” for price hikes, we are concerned about your termination of an investigation into unfair pricing practices that may enable corporate price gouging.
Due to the lack of strategy in designing the tariffs and chaotic implementation, the Trump Administration’s indiscriminate tariff policy will increase costs for the average American household without any hope of delivering long-term American reindustrialization or manufacturing employment gains.
Price increases could be even larger or more prolonged due to corporate price gouging. Price gouging occurs when sellers expand their profit margins by raising prices more than necessary to cover increases in input costs. President Trump’s on-again, off-again tariffs build an especially fertile environment for price-gouging. 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.
Price gougers may blame inflation and supply chain disruptions to justify these excessive price increases knowing that a lack of transparency will make it difficult to test their claims. Some large companies preemptively planned for price increases before any tariffs actually took effect. As the CEO of Autozone explained on an earnings call last September, “if we get tariffs…we generally raise prices ahead of [when] we know what the tariffs will be.” According to the head of an analytics firm that advises corporations on maximizing prices, abnormally high price spikes began in January—before specific tariff plans were announced—“and we’ve just seen higher and higher prices in that sample every week since.”
While small businesses operating on thin profit margins will be forced to pass on many costs to stay afloat, the chaotic and sweeping nature of President Trump’s tariffs is especially conducive to price gouging by large companies with significant market power. On a pricing webinar for businesses entitled “How to Raise Your Prices in Response to Tariffs,” a presenter noted “you’re going to be surprised by how much room you have [to raise prices].” Another consultant explained “there is perhaps more of a window to make changes to your pricing than there has been before. Customers expect change.” Even if President Trump decides to reduce or eliminate tariffs, companies may nonetheless decide to maintain higher prices—or raise them even further, claiming “market uncertainty.”
Some companies may even raise prices on goods that are not subject to tariffs. As Federal Reserve Chair Powell explained, “a great example is washing machines were tariffed in the last round of tariffs, and prices went up, but prices also went up on dryers, which were not tariffed. So, the manufacturers just, you know, they just kind of followed the crowd and raised it.” When asked if companies are raising their prices even if their goods are not actually subject to tariffs, oil executive Scott Sheffield said, “Yes, exactly … it gives them room to move prices up.” The FTC previously banned Sheffield from Exxon’s board of directors due to allegations that he attempted to collude with OPEC to reduce oil and gas output and ultimately raise gasoline prices for Americans and inflate profits for his oil company.
You claimed publicly that you “will be watching closely to make sure American companies are vigorously competing on prices. These necessary tariffs should not be interpreted as a green light for price fixing or any other unlawful behavior.” However, one of your first actions as Chairman of the FTC was to shut down a probe into the “surveillance pricing” market, what the FTC described as “the shadowy market that third-party intermediaries use to set individualized prices for products and services based on consumers’ characteristics and behaviors, like location, demographics, browsing patterns and shopping history.”
We urge you to fulfill your public commitment and to ensure President Trump’s trade war is not a “green light” for price gouging. Specifically, we urge you to:
- Use your authority under Section 6(b) of the Federal Trade Commission Act to require large companies to report their costs and retail and wholesale prices since November 6, 2024 and the extent to which tariffs have increased their costs.
- Use your authority under Section 5 of the Federal Trade Commission Act to investigate and prosecute companies engaging in “unfair or deceptive acts or practices in or affecting commerce.”
We additionally request responses to the following questions by May 30, 2025:
- Why did you close the docket for public comments on surveillance pricing practices on January 22, 2025 instead of maintaining the original deadline of April 17, 2025? Please provide any relevant documentation with respect to this decision.
- Did any Federal Trade Commission personnel advise you on terminating the public comment period early? Please provide any relevant documentation.
- Did any White House officials or personnel from agencies outside the Federal Trade Commission request that the public comment period be terminated? If so, who? Please provide any relevant documentation.
- Did you meet with any of the businesses subject to the inquiry or trade associations representing them in advance of the public comment termination notice? If so, which ones? Did they request such a termination? Please provide any relevant documentation.
- You initially voted to authorize the inquiry into surveillance pricing. Do you intend to initiate a new inquiry into the practice?
- How will you ensure President Trump’s tariff policy does not result in corporations price gouging consumers?
- What steps will the FTC take to enforce competition and consumer protection laws against individuals and corporations that attempt to price gouge consumers?
- What steps will the FTC take to ensure that consumers who have paid excessive price increases due to tariff-related price gouging are made whole?
We look forward to your prompt response.
