ARTICLE
24 June 2025

Tariffs And Counterfeits - A Silver Lining?

DW
Deeth Williams Wall LLP

Contributor

Founded over 30 years ago, Deeth Williams Wall LLP has grown from seven lawyers to 20, covering all aspects of IP prosecution, commercialization and enforcement; technology law; emerging technology protection and commercialization; privacy and data breach protection, management and coaching; litigation; and regulatory law. The firm acts for a number of large businesses, including an international oilfield services company, a provincial government, a major inter-bank data network, a top-tier hospital, an international soft drink company, an international retailer, and a number of Canadian tech start-ups. The firm has acted for several international drug companies on patent litigation, PM(NOC), and regulatory matters. It also provides day-to-day patent and trademark advice for major food, chemical, automotive and retail companies. Deeth Williams Wall and its lawyers have been ranked as an industry leader both in Canada and internationally by Lexpert Magazine, Canadian Lawyer, Best Lawyers of Canada, Who’s Who L

The recent imposition of tariffs by the United States may assist anti-counterfeiting efforts, both in the United States and Canada.
Canada Intellectual Property

The recent imposition of tariffs by the United States may assist anti-counterfeiting efforts, both in the United States and Canada.

The imposition of tariffs themselves will likely only have a minor effect on the flow of counterfeit goods, as counterfeiters have not been known to play by the rules and are not likely to accurately describe the origin and value of the goods that they sell. In many cases, since the goods are produced at low cost, the counterfeiters can either absorb any tariffs payable or even pay the tariffs and still sell their products below the cost of genuine articles.

The bigger effect on counterfeit goods will come from the lifting of the so-called de minimis exemption. In its simplest terms, many countries set floors for the declared value of goods below which duties do not have to be paid and fewer customs formalities observed. These thresholds are set in order to not burden the customs branch with inspecting a large volume of items which would only generate minimal revenues in duties payable. For consumers of low-value items, the cost of the duty is often exceeded by the cost of employing a customs broker to process the paperwork. The existence of the de minimis threshold has allowed e-commerce sites to sell a large volume of low-cost items and ship them directly to consumers in the United States and elsewhere.

In the case of the United States, the de minimis limit was $800 USD. With the elimination of this threshold, it can be expected that all imports of packages will have to declare a value and a larger volume will be subject to inspection for verification that the customs declaration is accurate. A greater volume of inspection is likely to yield a larger discovery of counterfeit goods.

In anticipation of a greater degree of scrutiny from United States Customs and Border Protection of incoming parcels, in the short term at least, it is reasonable to expect that counterfeiters will look to send their products to and through jurisdictions which either do not impose tariffs on imports from their jurisdictions or still maintain de minimis thresholds.

Whatever one's views are on the merits of tariffs, the elimination of de minimis thresholds in support of such tariffs should lead to a decrease in the import of counterfeit products and greater scrutiny of imported low-value products, which in turn should be a net positive for anti-counterfeiting efforts.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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