Former President Donald Trump has criticized Vice President Kamala Harris' call for a federal ban on food price gouging, labeling it as "communist" price controls. However, experts argue that Harris' proposal differs significantly from Soviet-style caps, and over three dozen states, led by both parties, already have their own measures in place to curb excessive pricing in the food industry.

In outlining her economic agenda if elected, Vice President Harris recently proposed cracking down on "excessive prices unrelated to the costs of doing business" by food and grocery sellers, especially in the aftermath of major mergers. Trump responded at a rally in Pennsylvania, characterizing Harris' plan as an attempt to institute socialist price controls following what he called catastrophic inflation.

While some pundits and analysts have questioned the effectiveness of Harris' proposal, drawing comparisons to President Richard Nixon's wage and price freezes in the early 1970s, others emphasize a crucial distinction. Erin Witte, director of consumer protection at the Consumer Federation of America, explained that price controls involve setting hard caps on prices, potentially leading to shortages as companies reduce production due to limited profit potential. In contrast, price-gouging laws focus on corporate conduct rather than specific pricing levels, requiring authorities to evaluate various factors to determine if the conduct is unlawful.

Although Harris' plan currently lacks detailed specifics, her intention is to collaborate with Congress in order to establish new regulations for price-setting within the industry. Additionally, she seeks to empower the Federal Trade Commission and state prosecutors to investigate and penalize "bad actors" who violate these rules. Many states already have their own anti-price gouging laws, although their goals and parameters may differ from Harris' proposal. As of 2022, 37 states and Washington, D.C. have regulations that prevent companies from rapidly increasing prices on certain goods and services under specific circumstances.

These state-level regulations primarily activate during emergency declarations, but some, such as Michigan's, are in force continuously. They tend to restrict excessive price jumps for essential items like fuel, medicine, water, and other products. Some states extend their coverage to a broader range of goods or even all consumer purchases, aiming to prevent sellers from taking undue advantage of shortages or unusual spikes in demand. During the pandemic, these rules were heavily enforced, with Texas being particularly vigilant and warning businesses of fines up to $250,000 for price gouging aimed at senior citizens.

It is important to note that Trump himself issued an executive order in March 2020 to combat corporate price gouging and hoarding of essential health and medical resources. This order, under the Defense Production Act, mandated the involvement of the Departments of Justice and Health and Human Services in preventing pandemic-related corporate misconduct.

Zephyr Teachout, a professor at Fordham University School of Law and senior counsel for economic justice in the New York state Attorney General's office, believes that a federal law would help address gaps present in the patchwork of state measures. She argues that state laws are effective against smaller operators but often fall short when dealing with large multinational companies that can evade regulations by operating across multiple states. Teachout suggests that Harris' plan could help to target the larger offenders in the market.

The Biden-Harris administration has prioritized controlling consumer price increases, and Vice President Harris is extending this focus. Despite inflation returning to normal levels after a peak above 9% over two years ago, Harris recognizes that many Americans continue to face economic hardships. However, some economists argue that the emphasis on corporate misconduct may be misplaced. Research conducted by the San Francisco Federal Reserve this year suggests that markups are unlikely to be the primary cause of the current surge in inflation. The food industry has also criticized Harris' proposal, stating that brands are not reporting excessive profits and warning that the crackdown could fuel further inflation.

The success of Harris' plan, should she win the White House and implement it, will largely depend on its enforcement. Erin Witte highlights that the effectiveness of any price-gouging ban will be determined by the rigor of enforcement measures put in place.

In conclusion, while Trump criticizes Harris' proposal for food price controls as "communist," experts emphasize key distinctions between her proposal and Soviet-style caps. With over three dozen states already having their own versions of price-gouging curbs, Harris aims to collaborate with Congress to establish new regulations to curb excessive pricing by industry heavyweights. The impact of her plan, if implemented, will be contingent upon effective enforcement measures.