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- Warren wants Trump's FTC to see if companies are using tariffs as cover for price gouging</p>
<p>Ben WerschkulJuly 10, 2025 at 7:11 AM</p>
<p>Sen. Elizabeth Warren and 15 other Democratic lawmakers are renewing a call for an investigation this week into whether "tariff enabled price-gouging" is set to impact consumers in the years ahead as President Trump's trade moves continue to ripple through the US economy.</p>
<p>This week's call came in a new letter, shared first with Yahoo Finance, where Warren and her colleagues are asking the Federal Trade Commission (FTC) to look into what they say is growing evidence that "hypothetical warnings about the potential for price gouging are now manifesting themselves in price increases at consumers' expense."</p>
<p>The evidence which the Democrats acknowledge remains anecdotal at this point centers around a recent survey from the Federal Reserve Bank of New York. That report raised concerns of companies "taking advantage of an escalating pricing environment" amid a larger portrait of businesses trying to grapple with their options about how and whether to pass along current and possible future tariff costs.</p>
<p>Senator Elizabeth Warren is seen at the U.S. Capitol in June. (Tom Williams/CQ-Roll Call, Inc via Getty Images) (Tom Williams via Getty Images)</p>
<p>The letter also underscores the political saliency of any and all consumer effects from Trump's trade plans, with Trump himself highly engaged on the issue and his White House often dismissing fears from both Democrats and independent economists that his trade moves will have an impact on prices.</p>
<p>Foreign nations and companies should "eat the tariffs" Trump often says. A new report this month from his Council of Economic Advisers found that prices of imported goods have actually fallen this year with faster declines than overall goods prices.</p>
<p>A second letter from Warren and her colleagues on the issue</p>
<p>This week's letter is the second from Warren and her colleagues after a May letter raised concerns about price gouging possibilities. That message was one the Democrats say Trump's team didn't respond to.</p>
<p>This week's follow-up calls on Andrew Ferguson, the Trump appointed chair of the FTC, to investigate whether "some large companies are taking advantage of President Trump's chaotic tariff strategy to price gouge consumers."</p>
<p>The evidence they cite for their concerns is a recent survey from the New York Fed that took a look at how companies and tariff costs and did find that — in addition to businesses passing on many actual tariff costs to consumers — "a significant share of businesses also reported raising the selling prices of their goods and services unaffected by tariffs."</p>
<p>The report acknowledges that other factors like rising wages and insurance costs play a role but maintains "it is possible that in some cases, businesses were taking advantage of an escalating pricing environment to increase prices."</p>
<p>A recent survey from the Institute for Supply Management also asked companies "how do you plan to change your selling prices for products or services in response to tariffs?"</p>
<p>In response, 2% of manufacturers and 4% of service companies responded that "Our costs will not be affected by tariffs, but we plan to use tariffs as an opportunity to raise prices."</p>
<p>It's a concern that has been raised off and on in recent months, with Federal Reserve governor Christopher Waller noting in a recent speech "I have heard the concern" but suggesting he didn't expect it to be a common practice.</p>
<p>"While this may happen in isolated instances" he added, "I do not believe it will be a significant source of additional inflation above and beyond the tariff-induced increase."</p>
<p>Warren is joined on this week's letter by Senators Ruben Gallego of Arizona, Cory Booker of New Jersey, Jeff Merkley of Oregon, Richard Blumenthal of Connecticut, and Jacky Rosen of Nevada.</p>
<p>House members on the letter are led by Rep. Rosa DeLauro of Connecticut. She signed alongside Reps John Garamendi of California, Chris Deluzio of Pennsylvania, Becca Balint of Vermont, Jerry Nadler of New York, Jim McGovern of Massachusetts, Mark Pocan of Wisconsin, Pramila Jayapal of Washington state and Alexandria Ocasio-Cortez of New York.</p>
<p>Another factor in the limited available research around the issue so far is whether companies are shifting prices in anticipation of tariffs that may or may not materialize.</p>
<p>The New York Fed offered an additional finding that the response can very much depend on a company's situation.</p>
<p>Some companies in the survey reported being unable to raise prices to cover tariff costs, but in one case cited "a heavy construction equipment supplier said they raised prices on goods unaffected by tariffs to enjoy the extra margin before tariffs increased their costs."</p>
<p>The bottom line, as Waller and others often note, is that tariff costs on their own are the main focus for economists looking at possible prices increases in the months ahead.</p>
<p>But that comes alongside the ample historical evidence that tariffs can have unpredictable price outcomes — such as in 2019 when Trump's tariffs on washing machines also pushed up the prices of dryers even though they were not subject to tariffs.</p>
<p>A response this time from the Trump administration to the letter, which was sent Wednesday evening, is far from certain.</p>
<p>But consumer effects from Trump's trade plans are sure to remain in focus. Trump himself has long had a keen interest in the topic, telling Walmart (WMT) earlier this year "I'll be watching" for any tariff-related price increases.</p>
<p>Ben Werschkul is a Washington correspondent for Yahoo Finance.</p>
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