Rising tariffs between the USA and other countries could be a major disadvantage in the fight against counterfeiting and IP-infringing goods. Several major US business associations* have issued a joint letter warning against this. The letter is quoted in the World Trademark Review as saying: “The administration’s Section 232 and Section 301 tariffs place significant barriers on the fight against harmful fakes.”
In their letter addressed at two members of the influential Committee on Ways and Means in the US House of Representatives, the associations forcefully explain why they are concerned about a negative impact of tariffs – especially for tariffs on countries that are generally regarded as trade-allies. According to them, the duties would entail additional costs for the industry, possibly at the expense of IP protection. In addition, rising tariffs could lead to an increase in demand for counterfeit products; namely when customers buy a fake product instead of an original that just got more expensive, no matter if intentionally or not.
„US tariffs on critical imported machinery not only hurt industries, but the additional costs trickle-down to consumers, thus affecting their choices“, the associations state. „Rather than pay more for legitimate goods, we fear that consumers might seek cheap counterfeits as a replacement, whether knowingly or unknowingly. In other words, US policy could help legitimise fake goods at the expense of rightful intellectual property owners.”
In addition, the trade associations also fear disadvantages if companies lose their market access due to customs duties. In the letter, the associations explain this using the example of US water treatment companies and their market opportunities in China: “Higher import duties on these products will give foreign brands preference for fulfilling China’s needs and shut them out of future competition. Restricted market access prevents industries from investing in critical anti-counterfeiting education, research, and development for protecting their intellectual property.”
The associations conclude by calling on the US administration to “continue its efforts to hold China accountable” when it comes to IP protection. In doing so, however, it should cooperate with America’s allies instead of having “fractured relationships resulting in multiple trade conflicts.”
