President Joe Biden on Friday attacked shipping companies over the prices they’re charging, as he also continued to tout his administration’s efforts to help Americans deal with high inflation.
His speech at the Port of Los Angeles followed news that the annual rate of inflation rose to 8.6% in May, topping forecasts and marking a fresh 40-year high. Rising rents and high gasoline and food prices drove up the latest reading for the consumer price index, or CPI.
Biden called for “letting those nine foreign shippers understand the ripoff is over.”
He said there are nine major companies that ship from Asia to the U.S., and they “have raised their prices by as much as 1,000%,” while their profit has increased by sevenfold in one year to $190 billion.
The president praised the Senate for passing the bipartisan Ocean Shipping Reform Act, adding that he’s “hopeful the House is going to act soon to crack down on these companies as I’ve asked and lower the cost.” The bill aims to establish new restrictions around how carriers may coordinate operations, prohibit shipping lines from “unreasonably” declining exports, and limit added fees on container handling.
Biden blasted Exxon Mobil XOM, -1.83% and other oil giants as well, saying they should use existing drilling permits and invest more, rather than spending on stock buybacks. Share repurchases should be taxed, he added.
“Exxon made more money than God this year,” he said, while telling the company to “start investing, start paying your taxes.” Some Democratic lawmakers have proposed taxes on the buybacks made by publicly-traded companies.
In addition, the president said inflation is a global challenge, and the U.S. can fight it better than other nations thanks to his economic policies.
“America can tackle inflation from a position of strength unlike any other country in the world,” he said.
“Every country in the world is getting a big bite and piece of this inflation — worse than we are, in the vast majority of countries around the world. But make no mistake about it. I understand. Inflation is a real challenge to American families.”
The president also said one of the key ways to fight inflation is by lowering the cost of moving goods through supply chains, and that’s why his administration has focused on decongesting the LA port and others. There are about 40% fewer containers clogging the docks for long periods currently than last November, Biden said.
The World Shipping Council, a trade group whose members include Hapag-Lloyd HLAG, -6.56%, Maersk MAERSK.B, -3.55% and HMM 011200, , didn’t immediately respond to a request for comment, while an Exxon spokesman pushed back on Biden’s characterization of the company.
“We have been in regular contact with the administration, informing them of our planned investments to increase production and expand refining capacity in the United States,” the Exxon spokesman told MarketWatch in an email. The company increased production in one key oil-and-gas producing area, the Permian Basin, by 70% between 2019 and 2021 and plans to boost output there by another 25% this year, he said. The spokesman also said Exxon has increased capital spending in the Permian Basin this year and ramped up refining, as well as reported total taxes of $40.6 billion on its 2021 income statement.
U.S. stocks DJIA, -2.73% closed sharply lower Friday after the CPI figure came in hotter than expected. The main equity gauges have tumbled this year, with the S&P 500 SPX, -2.91% down about 18%, as investors fret about inflation, the Federal Reserve’s interest-rate hikes to tame high prices, and the potential for a recession.
Biden’s moves to tame inflation have ranged from the largest-ever release from the U.S. Strategic Petroleum Reserve to programs that aim to make internet service free for 48 million low-income households. But economists have warned that presidents lack powerful weapons for battling high prices.
Analysts have stressed that Biden’s Democratic Party looks on track for defeats in November’s midterm elections if inflation persists. Americans’ frustrations with soaring prices are helping to keep Biden’s approval ratings low — and providing a talking point to Republicans ahead of the elections.
GOP Sen. Tom Cotton of Arkansas tied the president to high inflation in a tweet shortly after the CPI release:
Republicans are widely expected to regain control of the U.S. House of Representatives, with betting market PredictIt giving an 88% chance for that outcome. The GOP is getting good odds for taking back the 50-50 Senate, too, as PredictIt puts that likelihood at 77%.