Economists Push Back on Harris Price Gouging Plan

 US Vice President and 2024 Democratic presidential candidate Kamala Harris as she steps off Air Force Two upon arrival at Joint Base Andrews, Maryland, on August 23, 2024. (AFP)
US Vice President and 2024 Democratic presidential candidate Kamala Harris as she steps off Air Force Two upon arrival at Joint Base Andrews, Maryland, on August 23, 2024. (AFP)
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Economists Push Back on Harris Price Gouging Plan

 US Vice President and 2024 Democratic presidential candidate Kamala Harris as she steps off Air Force Two upon arrival at Joint Base Andrews, Maryland, on August 23, 2024. (AFP)
US Vice President and 2024 Democratic presidential candidate Kamala Harris as she steps off Air Force Two upon arrival at Joint Base Andrews, Maryland, on August 23, 2024. (AFP)

Kamala Harris's price gouging policy has been criticized by economists and analysts, who say it is an uncompetitive proposal that could end up hurting, and not helping, US consumers.

Harris, the Democratic nominee for president, announced the policy last week as part of a raft of populist proposals which included a $6,000-a-year tax credit for families with newborn children and a $10,000 tax credit for first-time home buyers.

If elected President, Harris would work with Congress to advance "the first-ever federal ban on price gouging on food and groceries," her campaign said in a statement.

The proposals would look to set "clear rules of the road" to stop big corporations from running up "excessive" profits on food and groceries, and beef up state and federal regulatory powers to penalize rule-breakers.

While popular with the Democratic base, the price gouging plans elicited a fierce reaction from Republican presidential candidate Donald Trump, who is running against Harris in November's elections.

"Kamala will implement SOVIET Style Price Controls," he wrote in a social media post a day after the proposals were published.

Supporters of the policy say it has been mischaracterized and misunderstood.

"When there is more concentration in an industry, we have seen much greater increases in the profit margins," US Senator Elizabeth Warren said in an interview with CNBC on Friday.

The Harris campaign did not respond to a request for comment. But several US media organizations, including the Washington Post, reported that the Harris campaign sees the policy as an attempt to elevate existing state-level rules on price gouging to the federal level.

- What price gouging? -

A global inflationary surge at the tail-end of the Covid-19 pandemic contributed to a sharp rise in the cost of everyday items across the United States.

Consumer inflation has eased dramatically since peaking at more than nine percent in 2022. But Americans are still contending with an overall price increase of just over 20 percent since Joe Biden took office, according to data from the US Labor Department.

However, "very little" of that increase is down to price gouging, Oxford Economics chief US economist Ryan Sweet told AFP.

Instead, Sweet points to a pandemic-fueled supply shock, and an increase in demand for goods and services spurred -- in part -- by generous federal support for households during the pandemic.

"What this gouging does is pivot the blame from the Biden administration, which Harris was part of, to corporations," said Gary Hufbauer, a nonresident senior fellow at the Peterson Institute for International Economics.

"It's a pretty successful political argument," he told AFP. "It has no economic basis."

- 'Penny business' -

The retail business is notoriously tough, with profit margins often in the low single digits -- in stark contrast to higher-margin sectors like tech.

"Is there a more competitive space than retail?" Target chief executive Brian Cornell said in an interview with CNBC on Wednesday that touched on Harris's price gouging plans.

"It is a penny business, and it's a very competitive space, and we provide the value consumers are looking for," he added.

But for people struggling with the cost of living, it's a difficult argument to make.

"People see that gasoline prices are higher than they were a few years ago, food prices are going to be higher than they were a few years ago," said Sweet, from Oxford Economics.

"But we're not going back down to the prices that we saw pre-pandemic," he added.

That's because easing inflation does not translate into lower sticker prices at the grocery store.

Instead, when wages increase faster than inflation -- as they have been for well over a year now -- the cost of those items relative to wages declines over time.

But it's a slow process.

The Federal Reserve appears increasingly confident that it is winning its battle to bring inflation back down to its long-term target of two percent.

On Friday, Fed chair Jerome Powell said "the time has come" to start lowering interest rates, lifting expectations of a rate cut next month.

"There's clear evidence that businesses' pricing power has started to diminish," said Sweet.

"I think over time, as inflation gets back down to the Fed's target, this discussion of price gouging is going to start to fade to the background," he added.



World Food Prices Dip in October, but Remain Higher Than a Year Ago

A worker carries loaves of bread for sale at a bakery in the capital city of Cairo, Egypt November 4, 2026. (Reuters)
A worker carries loaves of bread for sale at a bakery in the capital city of Cairo, Egypt November 4, 2026. (Reuters)
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World Food Prices Dip in October, but Remain Higher Than a Year Ago

A worker carries loaves of bread for sale at a bakery in the capital city of Cairo, Egypt November 4, 2026. (Reuters)
A worker carries loaves of bread for sale at a bakery in the capital city of Cairo, Egypt November 4, 2026. (Reuters)

World food prices edged lower in October as weaker import demand contributed to monthly declines in cereal, dairy and meat prices, but were still nearly 6% higher than a year earlier, the United Nations' Food and Agriculture Organization said on Friday.

The FAO Food Price Index, which tracks monthly changes in international prices for a basket of food commodities, ‌averaged 133.9 points ‌in October, down from a revised ‌135.6 ⁠in September.

The index ⁠was 5.9% higher than a year earlier, but remained 16.4% below its March 2022 peak.

FAO's cereal price index fell 4.5% from September and was 12.6% lower than a year ago, as wheat and maize quotations declined. Wheat prices eased on weak import demand ⁠and improved production prospects, especially in Argentina.

"Expectations of ‌easing constraints on Black ‌Sea export flows added to the downward pressure on prices, ‌although continued disruptions to Black Sea logistics limited the decline," ‌FAO said in a statement.

Maize prices also eased after reaching a three-year high in September, pressured by the US harvest, expectations of ample supplies in South America and renewed ‌prospects of easing tensions in the Black Sea region.

Vegetable oil prices edged up 0.3%, ⁠as ⁠higher soybean and sunflower oil prices more than offset a fall in rapeseed oil prices.

Sugar prices rose 6.6%, their fourth straight monthly increase, to the highest level since December 2024, after rainfall disrupted harvesting in Brazil. They were now 28.8% above a year ago.

The dairy index fell 1.1%, as lower butter and cheese prices linked to ample supplies and subdued demand outweighed gains in milk powder.

The meat index declined 1.2%, while still slightly above its year-earlier level, as ovine and bovine meat prices fell.


Copper Falls, Set for Worst Week Since March on AI Rout

Copper at the Aurubis copper smelting and refining plant in Hamburg, Germany. (Reuters)
Copper at the Aurubis copper smelting and refining plant in Hamburg, Germany. (Reuters)
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Copper Falls, Set for Worst Week Since March on AI Rout

Copper at the Aurubis copper smelting and refining plant in Hamburg, Germany. (Reuters)
Copper at the Aurubis copper smelting and refining plant in Hamburg, Germany. (Reuters)

Copper dropped on Friday and was set for its biggest weekly drop in London since March, as a rout in technology stocks battered markets.

Benchmark three-month copper on the London Metal Exchange was down 1.3% at $13,663 a metric ton by 0700 GMT. That placed it on track to fall 3.44% in the week, Reuters said.

The most-traded copper contract on the Shanghai Futures Exchange fell 1.08% to 106,830 yuan ($16,018.17) a ton.

The weakness reflects worries over AI investment, ‌with copper increasingly ‌influenced by "sentiment towards data center expansion," said ‌Craig ⁠Lang, principal analyst ⁠at CRU.

Technology shares were battered after Democratic wins in the US midterms fueled concerns that new regulatory oversight could cap the AI buildout.

On the other hand, supply constraints cushioned copper's decline.

"I would be cautious about calling this a sustained correction, given ongoing mine supply challenges and exceptionally tight ⁠metal availability outside the US," Lang said.

Copper stocks ‌in SHFE-monitored warehouses <CU-STX-SGH> fell by ‌over 24% this week to just 33,848 tons — the lowest ‌in almost three years. The closely watched Yangshan copper ‌premium <SMM-CUYP-CN>, a gauge of appetite for imports into key consumer China, increased to $210 a ton on Thursday, matching its record high.

Smelters in the country are facing a double squeeze of negative treatment ‌charges and lower sulfuric acid prices.

Meanwhile, warehouse inventories outside the US have been drawn ⁠down as ⁠material was pulled into the country ahead of a potential tariff on imports of refined copper.

"These physical constraints should provide some support against weaker investor sentiment," Lang said.

Among LME metals, aluminium lost 0.54%, zinc lost 1.42%, lead lost 0.45%, nickel dipped 0.23% and tin gained 0.83%.

On the SHFE, aluminium nudged down only 0.04%, zinc lost 1.35%, lead was little changed, down only 0.03%, nickel rose 2.14% and tin dropped 3.45%.

SHFE inventories were down across the board this week, led by sharp drops in aluminium <AL-STX-SGH> and lead <PB-STX-SGH>.


Emerging Economies Set to Match Advanced Nations’ Renewable Capacity Additions, IEA Says

Workers walk at Kalyon Karapinar solar power plant in Karapinar, Konya province, Türkiye, Oct. 14, 2026. (AP)
Workers walk at Kalyon Karapinar solar power plant in Karapinar, Konya province, Türkiye, Oct. 14, 2026. (AP)
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Emerging Economies Set to Match Advanced Nations’ Renewable Capacity Additions, IEA Says

Workers walk at Kalyon Karapinar solar power plant in Karapinar, Konya province, Türkiye, Oct. 14, 2026. (AP)
Workers walk at Kalyon Karapinar solar power plant in Karapinar, Konya province, Türkiye, Oct. 14, 2026. (AP)

Emerging ‌and developing economies outside China are expected to add as much new renewable energy capacity as advanced economies for the first time over the next five years, driven by the current energy crisis, the International Energy Agency said on Friday.

Gas and oil prices have soared this year as the US-Iran war disrupts traffic through the Strait of Hormuz, a key route for global oil and gas trade.

Global renewable energy ‌capacity is forecast ‌to increase by almost 4,800 gigawatts ‌between ⁠2026 and 2031, ⁠the IEA said in its annual outlook.

Emerging and developing economies are expected to add about 1,100 GW, roughly the same as advanced economies, with China adding around 2,550 GW, the agency said.

Capacity growth in Southeast Asia, Africa and the Middle East is ⁠expected to triple over the period, ‌led mainly by solar installations, ‌the IEA said.

China will remain the biggest contributor to ‌global renewable energy growth, although its share is ‌forecast to fall to 53% by 2031 from 60% in 2025.

India is emerging as the world's second-fastest deployer of renewables and is expected to more than double its contribution ‌to global growth by 2031 to nearly 8.5%.

Grid connection delays remain ⁠a major ⁠challenge, with projects awaiting connections worldwide rising 60% over the past year, equivalent to four times the wind and solar capacity connected to grids during the same period.

Grid constraints are expected to slow growth in advanced economies, with annual additions in Europe through 2031 forecast to remain broadly in line with 2025 levels.

Renewable energy is expected to meet 6% of global transport energy demand by 2031, while higher fuel-blending mandates prompted the IEA to raise its biofuels forecast by 40% from last year's report.