Tariff Price Gouging Prohibition

Summary#

This bill, called the No GOUGE Act, would ban selling goods affected by new or announced tariffs at what it calls an “unreasonably high price.” The main change is a federal rule that ties allowed price increases to the costs directly caused by a tariff. The bill also gives the Federal Trade Commission (FTC) power to enforce the rule, lets states sue, and requires yearly reports on prices from federal agencies.

• Main change: For five years after a tariff or a announced (planned) tariff, sellers may not raise prices for goods covered by that tariff by more than the costs directly caused by the tariff (with limited allowance for some other costs).
• Presumption of violation on “tariff-related shock” dates: On certain shock dates (when many tariffs take effect in a short time or a tariff jumps a lot), large firms are presumed to have violated the ban if prices are higher than the 180-day average before the tariff. Firms can try to rebut that presumption with strong evidence.
• Exemptions by firm size: Firms whose ultimate parent made less than $100 million in U.S. goods sales in the prior 12 months are exempt (amount adjusted each year for inflation).
• Enforcement and reporting: The FTC enforces the rule using its existing powers. The International Trade Commission (ITC), Bureau of Labor Statistics (BLS), and FTC must publish annual reports on prices and enforcement. The FTC must set up a way for consumers to report suspected violations.

What it means for you#

• Consumers: If the bill is enforced, consumers could see fewer sudden price jumps on goods that are subject to new tariffs or announced tariff changes. The law targets price increases beyond the tariff-related cost.
• Large manufacturers, importers, and retailers: Companies with large U.S. sales (especially those with $1 billion or more in annual U.S. goods revenue) face stricter scrutiny. On shock dates, such companies are presumed to have overcharged unless they prove otherwise. They will likely need records to show how much of a price increase was caused by the tariff.
• Small businesses: Companies whose ultimate parent earned under $100 million in U.S. goods sales in the prior year are generally exempt from the ban.
• Companies assembling goods in the U.S.: The rule covers final goods assembled in the United States if a component is subject to a tariff. Firms must track component-level tariff impacts.
• Federal agencies (FTC, ITC, BLS, USTR, Customs): The FTC must write rules, take complaints, investigate, and enforce. ITC and BLS must produce annual price reports and may need to change surveys or data collection.
• State attorneys general: States may sue on behalf of their residents to stop violations, get refunds, or seek other relief. They must notify the FTC when they bring such suits.

Expenses#

No publicly available information.

Possible cost items the bill itself implies (stated carefully):

• This could increase administrative and enforcement costs for the FTC to write rules, handle consumer reports, investigate complaints, and bring cases.
• The ITC and BLS must prepare annual public reports and may need new survey questions or data collection, which could raise agency costs.
• Businesses may face compliance costs to track tariff-related costs, document price changes, and defend against investigations or lawsuits.
• States could incur legal costs when bringing parens patriae enforcement actions.

The bill does not include a fiscal note or specific cost estimates in the text provided.

Proponents' View#

The bill’s text and structure suggest these intended benefits or reasons someone might support it:

• The bill appears intended to prevent firms from using new or announced tariffs as an excuse to raise consumer prices by more than the tariff’s cost.
• Supporters may argue this would protect consumers from sudden price spikes after tariffs or tariff announcements.
• The presumption on “tariff-related shock” dates gives regulators a practical way to target likely problem cases quickly.
• Annual reporting by ITC, BLS, and the FTC aims to increase transparency about how tariffs affect prices and to track enforcement outcomes.
• Exempting smaller companies narrows the rule to larger firms that have greater ability to absorb costs.

Opponents' View#

The bill’s design raises a number of practical questions and possible concerns:

• One concern is that the bill does not clearly explain how to calculate “costs directly generated” by a tariff. It may be hard for businesses and regulators to agree on what counts as a tariff-driven cost.
• The term “planned tariff” (public statements by officials) could create uncertainty. The bill bars using tariff-driven costs for planned tariffs until a tariff actually starts, but planned-tariff coverage elsewhere could still affect behavior.
• The presumption of violation on “tariff-related shock” dates applies to large firms and depends on a 180-day price baseline. That baseline could be distorted by seasonal changes or other factors, producing disputes.
• The bill could increase litigation and compliance burden for companies required to document cost changes and defend rebuttals with “clear and convincing evidence.”
• It is unclear how enforcement will interact with trade policy or business decisions about passing through costs, supply changes, or sourcing adjustments.
• The bill requires federal agencies to report and possibly change surveys; the scale and cost of those data changes are not specified.

What is unclear:

• The precise penalties or remedies that would apply in every case are not spelled out here; the bill refers to the FTC Act’s enforcement powers and remedies for details.
• How regulations the FTC will write will define key terms and processes (for example, other characteristics that may define “unfair leverage”) is not yet specified.