(Reuters) – President Joe Biden is trying to attack U.S. inflation that recently hit a 31-year high and is eroding his popularity by blasting supply chain logjams and going after what the White House calls “pandemic profiteers.”
Biden has an uphill battle, because there is simply no magic bullet https://www.reuters.com/world/us/republicans-blame-biden-inflation-are-they-right-2021-11-01 a president can use to cure inflation, economists say. And the longer prices stay high, the greater the chance that inflation fears become “de-anchored,” or untethered from reality, making them harder to fight.
Supply chain experts said measures like keeping ports running 24 hours a day will help get more goods onto retailers’ shelves, but warn https://www.reuters.com/world/us/us-supply-chain-too-snarled-biden-christmas-fix-experts-say-2021-10-14 that disruptions could last well into 2022. Treasury Secretary Janet Yellen https://www.reuters.com/business/yellen-expects-inflationary-pressures-ease-by-second-half-2022-2021-10-29 and the Federal Reserve https://www.reuters.com/business/inflation-wage-data-challenge-fed-transitory-narrative-2021-11-01 have repeatedly said this year that they believe inflation is transitory.
OIL RESERVE RELEASES
Frustrated by the refusal of the Organization of the Petroleum Exporting Countries and Russia to boost production, the Biden administration is urging China and other oil-consuming nations to consider releasing crude stockpiles https://www.reuters.com/business/energy/exclusive-us-asks-big-countries-coordinate-releases-oil-reserves-sources-2021-11-17to lower global energy prices.
China and other governments are looking at releasing oil from their strategic reserves in response, but Japan and South Korea said they cannot do so simply to deal with rising prices.
OIL COMPANY INVESTIGATIONS
Citing mounting evidence that anti-consumer behavior by oil and gas companies is keeping fuel prices elevated, Biden this week asked the Federal Trade Commission, an independent agency, to dig deeper into possible “illegal conduct” in the market https://www.reuters.com/business/energy/biden-asks-ftc-redouble-probe-possible-illegal-conduct-by-oil-gas-companies-2021-11-17.
The FTC launched an initial probe in August, but such probes seldom bear fruit because collusion in gas prices is hard to prove. Consumer advocates say Lina Khan, the progressive chair of the commission, could utilize additional authorities granted under a 2007 energy law to go after oil and gas companies.
SHIPPING FEE PROBE
The Biden administration in July asked the Federal Maritime Commission to investigate https://www.reuters.com/business/cop/us-regulator-expects-find-abuses-shipping-amid-supply-chain-woes-2021-11-02 excessive shipping fees, and on Thursday urged the independent agency to consider challenging the ocean carrier alliances https://www.reuters.com/article/supply-chain-usa-shipping-idINKBN2I22K0 that dominate global shipping if their actions resulted in unreasonable costs or delays.
Shipping alliances are legally immune from antitrust laws, but the commission can challenge them if they result in unreasonable delays or higher costs, or “substantially lessen competition,” the White House said.
UNCLOGGING PORTS, EXPANDING TRUCKER HOURS
Biden also worked with unions and ports to make operations at the Ports of Los Angeles and Long Beach run 24/7 https://www.reuters.com/video/watch/idOVEYZZLY7, which has increased goods movement there. He enlisted big retailers https://www.reuters.com/world/us/biden-cite-progress-unsnarling-supply-chain-meeting-with-labor-industry-2021-10-13, including Walmart and Target, to move goods faster.
In addition to some $17 billion earmarked for ports in the recently enacted infrastructure law, the White House announced immediate investments https://www.reuters.com/world/us/white-house-looks-move-quickly-17-bln-revamp-us-ports-2021-11-09 to alleviate congestion at Georgia’s Port of Savannah by building five pop-up container yards.
A shortage of truckers is still causing delays. The Transportation Department expanded hourly work restrictions for drivers on Sept. 1 to support the flow of emergency goods.
MEAT PROCESSING PROBE
Biden is also taking aim at the four companies that control much of the U.S. meat processing market. White House officials have pledged to “crack down on illegal price fixing” in the industry, and have earmarked $1.4 billion in COVID-19 stimulus funds for small meat producers and workers. https://www.reuters.com/business/biden-administration-plans-tougher-action-rein-meat-prices-2021-09-08
Easing tariffs on hundreds of billions of dollars of Chinese imports could also have a “disinflationary” effect https://www.reuters.com/business/yellen-says-reciprocal-lowering-tariffs-could-help-ease-inflation-2021-11-01, Treasury Secretary Janet Yellen told Reuters earlier this month.
U.S. officials are pressing China to fulfill its pledge to buy $200 billion in additional American goods and services under the two-year U.S.-China Phase 1 trade deal, before considering any steps to reduce tariffs, she said.
Biden could also use his authority under a 2015 budget bill to declare an emergency and limit or stop oil exports for up to a year, or ask the Commodities Future Trading Commission to revisit position limits enacted under the Dodd-Frank financial reform measure. Such moves are seen as long shots.
(Reporting by Andrea Shalal; Editing by Heather Timmons and Jonathan Oatis)