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Biden pledges to tackle monopolies, supply shortages as prices rise

by Reuters
Thursday, 27 May 2021 23:31 GMT

(Adds industry reaction, background on policies)

By Andrea Shalal and Trevor Hunnicutt

CLEVELAND, May 27 (Reuters) - President Joe Biden pledged on Thursday to root out anti-competitive business practices and ease construction materials shortages and transportation backups that are causing price hikes across the country.

"In the coming weeks, my administration will take steps to combat these supply pressures, starting with the construction materials and transportation bottlenecks, and building off the work we're doing on computer chips," Biden said in a speech at Ohio's Cuyahoga Community College.

"We're also announcing new initiatives to combat anti-competitive practices that hurt small businesses and families."

In recent weeks, the United States has faced shortfalls and bottlenecks from lumber to computer chips to port cargo backlogs. Together with labor shortages, those issues are making homes, cars and consumer goods pricier and harder to get.

U.S. economic data on Friday is expected to show that a closely watched gauge of inflation, the personal consumption expenditures index excluding food and energy, increased 0.6% in April.

The price hikes and related inflation fears threaten to undermine Biden's argument that the U.S. economy needs trillions in government spending to grow and create jobs in the years to come.

Biden did not specify on Thursday which policies he is considering. But the administration has been looking for ways to combat industry concentration and monopolies and ease shortages in goods like lumber and steel, and is studying the impact of tariffs, according to people familiar with the matter.

Lumber shortages have sent prices skyrocketing, and homebuilders worry they could go still higher if the U.S. Commerce Department finalizes a preliminary decision that could double tariffs on Canadian wood imports.

"We would like to see the president lift tariffs on key construction materials, including lumber, steel and aluminum," said Brian Turmail, a spokesman for the Associated General Contractors of America.

The administration is set next week to wrap up an initial supply-chain review https://www.whitehouse.gov/briefing-room/presidential-actions/2021/02/24/executive-order-on-americas-supply-chains intended to shore up U.S. access in four key areas: computer chips, electric-vehicle batteries, pharmaceuticals and minerals used in electronics.

"You can't reboot a global economy like flipping on a light switch," Biden said, adding there would "be ups and downs in jobs and economic reports. There's going to be supply-chain issues - price distortions on the way back to a stable and steady growth."

The remarks come a day before Biden releases a multitrillion-dollar budget wish list to Congress that includes proposed new spending on infrastructure, manufacturing subsidies, childcare and climate change.

Biden argues that those investments are necessary for the United States to compete with key rival China, squash inequality and trim the ranks of the unemployed following the COVID-19 pandemic.

Republicans object to much of Biden's extra spending and his plans to pay for it by hiking taxes on high-income earners and big corporations.

(Reporting by Andrea Shalal in Cleveland and Trevor Hunnicutt in Washington; Additional reporting by David Lawder; Editing by Peter Cooney and Heather Timmons)

Our Standards: The Thomson Reuters Trust Principles.