Made In China – Why The United States Cares About Counterfeiting

President Trump’s administration has taken a hard stance against counterfeiting, imposing hefty tariffs on what it says is China’s widespread intellectual property theft. Historically, China has been a haven for counterfeiting. Recently, China and the United States prepared to battle it out in a trade war that began long ago but escalated when the U.S. hit China with the heavy steel and aluminum tariff.


China responded with tariffs of its own on goods imported from the United States, particularly agriculture goods like American-made wine and nuts. The Trump administration wouldn’t let the blows end there. It announced a second round of tariffs, one that was widely anticipated and that is estimated to total $50 billion a year. This new collection of tariffs covers many products from China with emphasis on medical devices and televisions. What did China do? Within 24 hours, the country hit back with second tariff wave, too. Soybeans, whiskey and cars now come with a tariff of $50 billion annually.


Why Does the U.S. Care About China’s Counterfeiting?


Counterfeit goods, the theft of trade secrets and software piracy account for a $600 billion loss to the American economy each year, says a private watchdog. The Commission on the Theft of American Intellectual Property put out a report last year that valued losses to the American economy between $180 billion and $540 billion annually. Every year, counterfeit goods cost the U.S. between $29 billion and $41 billion. Pirated software costs $18 billion per year.


These numbers echo the Office or the Director of National Intelligence’s findings, which stated in 2015 that the annual cost of espionage to the American economy via computer hacking was $400 billion. The Commission says that China is the leading culprit in the world when it comes to counterfeit goods and intellectual theft. Roughly 87% of all counterfeit goods seized when entering the U.S. come from China, including Hong Kong. The Commission report clearly states that the Chinese government encourages the theft of intellectual property.


Utah Governor and former Republican presidential candidate Jon Huntsman leads the Commission along with Adm. Dennis Blair. Huntsman previously serves as U.S. Ambassador to China and Blair is former director of U.S. national intelligence.


According to Huntsman, the far-reaching and illegal transfer of innovation from America is one of the biggest economic issues facing the U.S. today. It impacts our country’s competitiveness and it’s an issue that Huntsman feels our government has not fully addressed. He believes it must be a top priority for the Trump administration.


If you’re interested in learning more about counterfeiting and intellectual property theft, consider diving deeper into these issues in your required CLE courses. MCLEZ offers an easy way for attorneys to find out more about topics they’re interested in and fields they want to practice in.