28 Jun
2018

Trump administration tariffs “could help legitimise fake goods”: trade associations join up to sound alarm bells

  • Six trade associations collaborate to warn of effects of US tariff policy
  • Primary concern is that US policy “could help legitimise fake goods”
  • Also state retaliatory tariffs can restrict investment in anti-counterfeiting


A number of major US trade associations have joined forces to send a letter to two members of the House Ways and Means Committee warning that the Trump administration’s recent trade tariffs are having a harmful effect on the battle against counterfeit goods. The strongly worded letter, seen by World Trademark Review, claims that the tariffs place “significant barriers on the fight against harmful fakes” and calls for an urgent rethink.

Earlier this month, we reported on the Precious Metals Association of North America (PMANA) and the Fashion Jewelry and Accessories Trade Association (FJATA) releasing a public statement about their concerns over the Trump administration’s steel and aluminium tariffs on the European Union. In it, the two associations claimed the move “weakens” the ongoing battle against fake goods and risks “alienating multiple allies”.

Fast forward a few weeks, and the two associations have stepped up their opposition to the tariffs – and this time four more trade groups (the American Apparel & Footwear Association, American Bridal and Prom Industry Association, National Office Products Alliance, and the Water Quality Association) have joined to sound the alarm bells. In a jointly-written letter sent to two members of the Ways and Means Committee, chairman Kevin Brady (R-TX) and ranking member Richard Neal (D-MA), the six associations voice concern about the Trump administration’s recent imposition of tariffs against commonly-regarded trade allies. “We write to you to with the utmost urgency,” the letter begins. “These tariffs do more harm than good to our industries and our country’s national security.”

In spelling out its reasoning, the letter points to the scale of global trade in counterfeit goods, and how additional cost for industries could drain the resources available to combat illicit trade. “The administration’s Section 232 and Section 301 tariffs place significant barriers on the fight against harmful fakes,” the association’s state. “US tariffs on critical imported machinery not only hurt industries, but the additional costs trickle-down to consumers thus, affecting their choices. 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.”

As well as the risk that tariffs could indirectly lead to a rise in counterfeit trade, the letter also claims that industries targeted by retaliatory tariffs could lose out on market access to international competitors – a move that could, again, harm the fight against fakes. The letter expands: “For example, China’s plan to improve water quality presents a major opportunity for US water treatment brands who have a trusted reputation worldwide. 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.”

In closing, the letter urges the Trump administration to “continue its efforts to hold China accountable” when it comes to respecting US intellectual property rights. However, “such a strategy should include a collaborative front with our trade allies – not fractured relationships resulting in multiple trade conflicts”.

Talking to World Trademark Review, PMANA spokesperson Mitchell Moonier confirmed that the letter was sent due to added urgency over the last few weeks. “With the growing divisions between the US and our trade allies, it is doing more harm than good to these industries, especially when it comes to fighting back against counterfeits,” he explained. “The plan, right now, is to request the House Ways and Means committee exert more oversight on the Trump administration’s trade actions. Last week, the Senate Finance committee held a hearing with Secretary Wilbur Ross, which was the first such Congressional hearing since the trade conflicts have escalated with retaliation from the targeted countries. There are many trade priorities to consider – our goal is to ensure that the issue of counterfeits is one of them.”

There are clearly significant concerns from trade associations on how the ongoing Trump administration tariffs could negatively affect the war on fakes, at least from a US perspective. Whether such letters will make a difference remains to be seen.

Tim Lince

Author | Senior reporter

tlince@GlobeBMG.com

Tim Lince