If all of the Trump administration’s proposed tariffs take effect, the impact of those tariffs on the US economy and the American people will likely be debated for years to come. Regardless of the outcome of that debate, companies should know that the US antitrust agencies are monitoring the responses of companies affected by tariffs.
What the Antitrust Leaders Said
Recent statements by the US agencies’ antitrust leaders call out pricing changes triggered by tariffs as potential anticompetitive behavior. Federal Trade Commission (FTC) Chairman Andrew Ferguson posted on X, “President Trump is reorienting our nation’s economy to put Americans first. As we adjust to the new economic order, the @FTC will be watching closely to make sure American companies are vigorously competing on prices.” He added, “[T]hese necessary tariffs should not be interpreted as a green light for price fixing or any other unlawful behavior. We will always protect American consumers.”
Department of Justice Principal Assistant Attorney General Roger Alford said on a panel, “[T]here is a risk of antitrust response, anti-competitive behavior, responding to the high tariffs, and that is dynamic pricing behavior of the remaining competitors. And …, if there’s high tariff walls [for foreign competitors] and then you go from only three competitors to two competitors, then you have dynamic pricing risk associated with that. And so we really need to be careful to watch for that when you do your market share calculations, when you do your analysis of conduct, we have to look to see if the tariffs will, in any way, shape, or form impact what we saw in the first administration, [where] there was a change to the pricing behavior when LG was basically excluded from the market, and then LG very quickly ramped up their production. But that is a risk, and also, for that matter, how [do] you count the number of market players in the situation, right?”
How to Navigate Tariff-related Price Increases
These statements are vague and introduce uncertainty. Do the antitrust agencies intend to investigate companies’ decisions to increase prices due to tariff-related cost increases, or are they monitoring for egregious anticompetitive behavior? To date, neither agency has offered clarification. Companies can, however, mitigate some risk by:
- Setting pricing unilaterally—not in conjunction with competitors or distributors
- Documenting rationales for pricing policies, processes, and determinations
- Consulting an antitrust attorney if the company operates in a consolidated industry and is considering price increases because of increased tariff costs
McCarter & English’s Antitrust team is monitoring the US antitrust agencies’ activity related to tariff-response pricing. Contact Robin Crauthers to discuss pricing policies and antitrust risk.