President Donald Trump’s announcement that an additional $200 billion in tariffs will be placed on Chinese products has been seen as a way to perhaps put pressure on the Chinese government to stop intellectual property theft and enforce its IP laws. But experts who have worked in China and studied the issue are skeptical the tariffs will have much of an impact.
Dan Harris, a partner at international law firm Harris Bricken, said a couple of weeks ago he was at a meeting with approximately 75 people, and most agreed that the tariffs were put in place to pressure to the Chinese government to confront intellectual property theft.
A report from the U.S. Patent and Trade Office in April found that China’s IP protection was among the weakest in the world. Another report by brand and trademark protection company CompuMark released in May found that Chinese companies were filing for trademarks at a rate that is set to outpace companies in the U.S. Some experts also said, however, that many of the applications are paid for by the Chinese government and are for fake products that won’t make it to store shelves.
“The goal here is to get China to really start enforcing its intellectual property laws and really open things up for the internet, banking and movies,” for U.S. businesses, Harris said.
“China is fine with enforcing its intellectual property laws when it comes to auto parts, television and clothing. But it’s never going to stop taking key intellectual property such as artificial intelligence,” Harris said.
Another theory is that tariffs on Chinese imports are meant to encourage U.S. companies to manufacture their products in the U.S. instead of abroad, said Gerben Law Firm trademark attorney Eric Perrott. However, he said he believes it is unlikely that companies would shift manufacturing back to the United States.
As far as China’s reaction to the tariffs, Perrott doesn’t anticipate much change from the Chinese government in terms of cracking down on counterfeiting, for example. “The Chinese government could certainly do more to crack down on factories and counterfeiters. The penalties aren’t as harsh as they could be,” Perrott said.
Perrott said that for real change to occur, online retailers across the globe would have to vet who is putting products on their websites.
Harris said he believes the trade situation will remain the same for some time.
“For the Chinese government to stay in power, they believe they need to control anything that looks or smells like media and banking,” Harris said. “That includes the internet and includes the entire banking system. They’re not going to back down from getting really important things that can help them militarily and economically.”
Harris also said he doesn’t see the U.S. backing down from imposing and raising tariffs on China.
“This is the new normal,” Harris said.