Democrats are pushing a bill prohibiting price gouging at the federal level and giving the Federal Trade Commission another $1 billion and new tools to go after companies charging “grossly excessive” prices.
Democrats say such protections are needed as President Donald Trump rolls out higher tariffs on foreign nations as part of an effort to overhaul global trade. A tariff is a tax on imported goods that the importer pays to the federal government. That importer can then absorb the loss, or try to pass the added costs on to consumers through higher prices.
Critics say the measure could actually make shortages of key products worse.
A group of Democrats reintroduced the Price Gouging Prevention Act “to fight back against the corporate greed enabled by the Trump administration’s chaotic tariff policies,” they said. The bill would give the FTC and state attorneys general new tools to enforce a federal ban against “grossly excessive price increases.”
“Donald Trump’s reckless tariff policies are giving companies cover to squeeze families and raise prices more than necessary,” said U.S. Sen. Elizabeth Warren, D-Mass. “My bill is an opportunity for Congress to stand up for families by cracking down on price gouging and fighting back against corporate abuse.”
Ryan Bourne, of the Cato Institute, said the measure was just as bad as it was the first time it was introduced.
“This ‘anti-price gouging’ bill is a reheated version of Elizabeth Warren’s earlier misguided proposal. Back then, Democrats found it politically convenient to blame greedy corporations for an inflation overwhelmingly caused by excessive government spending and loose monetary policy,” he told The Center Square. “Now, the same politicians are using the price-inflating effects of Donald Trump’s tariffs to revive their anti-corporate legislation.”
Bourne said the measure could exacerbate shortages at critical times, such as after a natural disaster.
“The results of such a federal law would be disastrous. Capping prices below what people are willing to pay for goods would produce shortages and empty shelves during volatile periods,” he said. “Firms today face ever-shifting trade barriers, unpredictable demand conditions, and evolving supply chains – all factors that increase price volatility. This legislation would compound those problems by turning pricing decisions into legal liabilities. Firms fearing prosecution would hesitate to raise prices even when those higher prices accurately reflect genuine scarcity or increased risks. The price controls would thus risk making goods’ shortages far more severe and prolonged.”
Democrats first introduced the measure in 2024, but it failed to advance. During the COVID-19 pandemic, Democrats proposed similar measures to prevent price gouging.
The bill would clarify that price gouging is an unfair and deceptive practice under the FTC Act. The measure would allow the FTC and state attorneys general to stop sellers from charging a grossly excessive price, regardless of where the price gouging occurs in a supply chain or distribution network, according to a news release.
“Greedy corporations are using the economic turmoil the Trump Administration has created to gouge the American people on everything from groceries to consumer goods,” said Congresswoman Jan Schakowsky, D-Ill. “While these large corporations rake in record profits, families in my community and across the country are struggling to put food on the table.”
The bill would give the FTC an additional $1 billion in funding to do the work. It would establish when price gouging occurs during a significant shift in trade policy. It lists a set of market shocks – including an “abrupt or significant shift in trade policy” – and outlines a standard for a presumptive violation of the price gouging prohibition during such a shock, such as when companies brag about increasing prices, according to Democrats.
The measure would also create an affirmative defense for small businesses acting in good faith. Sponsors noted that “small and local businesses sometimes must raise prices in response to crisis-driven increases in their costs because they have little negotiating power with their price-gouging suppliers.” That affirmative defense protects small businesses earning less than $100 million from frivolous litigation if they show “legitimate cost increases.”
The bill would further require public companies to disclose costs and pricing strategies.
“During periods of exceptional market shock, the bill requires public companies to transparently disclose and explain changes in their cost of goods sold, gross margins, and pricing strategies in their quarterly SEC filings,” according to the sponsors.
Warren and Schakowsky face an uphill battle in the Republican-controlled House and Senate. Republicans have been moving in the opposite direction. The Trump administration has worked to dismantle the Consumer Financial Protection Bureau, a federal agency created after the 2007-08 financial crisis to establish a single agency responsible for enforcing consumer protection laws.
Former Vice President Kamala Harris promised to introduce a federal anti-price-gouging law during the 2024 presidential campaign.
