The Ripple Effect: The Link Between Trade Tariffs And Trademark Renewals

From restricted use in commerce to increased risk of counterfeiting and brand dilution, the imposition of trade tariffs can have serious consequences for businesses. David Godoy discusses the impact of tariffs on registered trademarks and explains how Questel can help brand owners renew their global trademark registrations effectively in challenging times.

In recent years, tariffs have re-emerged as a central tool of trade policy around the world. Frequent changes in tariff regimes, reciprocal duties, retaliatory measures, and trade wars can dramatically alter cost structures, supply lines, and market access. For companies with global trademark registrations, these shifts are more than just unpleasant: they can affect strategy, risk, and even the viability of maintaining certain registered trademarks. Below, we explore the key ways tariff uncertainty can affect global trademark renewals, and what companies and service providers should do to adapt.

1. Reduced Use in Commerce/Risk of Non-Use

One core requirement in many jurisdictions for maintaining or renewing trademark registrations is use in commerce, e.g., in the United States. If your goods or services are no longer being sold in a country (or region), or are delayed, scrapped, or rerouted, you may become vulnerable to challenges for non-use. Tariffs can lead to such disruptions in several ways:

• High duties may make importing your finished goods or components prohibitively expensive, reducing sales volume or leading to the withdrawal of certain product lines.
• Supply chain disruption—delays, increased costs—may make it difficult to maintain regular distribution in certain markets.
• If tariffs or trade barriers cause you to shift manufacturing or sourcing elsewhere, there can be a lag or a complete stop in activity in affected regions, which can trigger non-use claims.

Therefore, seeking legal advice on the particular requirements your trademark portfolio might face in each jurisdiction where you operate or intend to have commercial activity is an important due diligence task.

2. Prioritization of Markets

Tariff uncertainty can lead to increased costs (import duties, customs compliance, changing suppliers, shipping, etc.), which puts pressure on profitability. Under cost pressure, firms often must make hard decisions about where to invest. For trademark renewals, this means:

• Prioritizing renewals in markets that are stable, high-value, or strategically important.
• Possibly allowing some registrations in less critical or loss-making jurisdictions to lapse, if maintaining them is not cost-justified.
• Deferring renewals (if options permit) or reducing the scope of classes or goods/services in registrations to reduce renewal fees.

However, letting trademark registrations lapse or reducing scope can have long-term downsides: competitors may apply for similar marks, brand protection may weaken, and re-entry might become harder.

3. Shifts in Supply Chain & Manufacturing Footprint

Tariffs often drive companies to relocate manufacturing, or switch supply sources, to avoid high import duties or meet origin‐based trade rules (e.g., Free Trade Agreements, Rules of Origin). This affects trademark strategy in multiple ways:

• If production moves to a new country, you may need or want trademark protection in that country (or region) both for enforcement and to protect local branding or packaging.
• Goods routed through new jurisdictions may be imported into markets under different tariff regimes; local trademark registration helps with customs enforcement, anti-counterfeiting, and regulatory compliance.
  

Therefore, a global trademark renewal strategy needs to be aligned with supply chain decisions, as new manufacturing locations can create new jurisdictions of exposure.

4. Increased Risk of Counterfeiting and Brand Dilution

By increasing the cost of legitimate goods, tariffs can open a gap for counterfeits or grey market goods. In turn, this can harm brand reputation and undermine the legal strength of your registered trademarks. Some key points:

• Counterfeit goods may flood into markets where your goods are too expensive, or their supply is restricted because of tariffs or import delays.
• Customs authorities often play a crucial role in blocking counterfeit or infringing goods at the border. But without properly registered trademarks in the relevant country, your ability to enforce them may be limited.
• Brand owners may need to invest more in monitoring and enforcement, making it even more important to keep trademark registrations active.

In such volatile scenarios, Questel can support you in designing a global trademark renewal strategy that will help you reduce risks and make your portfolio more resilient, for instance, by:

• 1. Helping you prioritize trademark renewals and budget appropriately.
• 2. Reducing the risk of non-use cancellation by extracting and classifying consistent use of marks in commerce.
• 3. Staying on top of IP law/trade changes that might have an impact on the value of your trademarks.
• 4. Securing the protection of your core trademarks while being cost-conscious in marginal markets or shifting registrations (e.g., reducing classes, limiting goods/services) to reduce costs.
• 5. Helping you with your financial planning by building flexibility on your renewal costs to account for tariff expenses.

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.