China Remains the Epicenter of Counterfeit Products, a New USTR Report Finds

The Office of the United States Trade Representative’s Notorious Markets List examines how counterfeit trade has evolved online post-Covid.

It’s awards season! This year’s Grammys are slated for Feb. 5 and the Oscars on Mar 12, with a slew of ceremonies and honors in between. But there’s a special honor bestowed by the Office of the United States Trade Representative every year that’s already been announced. You may have missed it because a favorite nearly always wins it. Please collect your award yet again, China, for the Most Notorious of the Year. Congratulations or something.

The Office of the United States Trade Representative released its 2022 Review of Notorious Markets for Counterfeiting and Piracy on Jan. 31.  First issued in 2006, the Notorious Markets List (MNL) aims to motivate the private sector and governments to reduce piracy and counterfeiting, but — as with so many other standards of global trading — China appears to largely ignore the list’s findings year after year.

“China continues to be the number one source of counterfeit products in the world,” the report states. “Counterfeit and pirated goods from China, together with transshipped goods from China to Hong Kong, accounted for 75% of the value (measured by manufacturer’s suggested retail price) of counterfeit and pirated goods seized by U.S. Customs and Border Protecting (CBP) in 2021.”

Though Covid debilitated some of the most prolific counterfeit shopping centers, rising tourism this past year has led to the resurgence of counterfeit markets, the NML notes. And since the start of the pandemic, many sellers have transitioned to e-commerce platforms and developed social media as a platform for sales where counterfeit luxury items are often euphemistically presented as “dupes.”

The Office of the USTR notes that Chinese authorities reportedly do little to stymie counterfeit business. “Right holders describe local officials as unhelpful or unwilling to pursue investigations recommended by either firms or enforcement officials from other cities,” the NML report states.

Counterfeits most obviously damage the brands whose goods are duplicated, but those who suffer the most from this crime are workers.

“The widespread trade in counterfeit and pirated goods harms the economic security of American workers and undermines our work to craft equitable and inclusive trade policy,” said U.S. Trade Ambassador Katherine Tai. 

This year’s NML report features a special focus section examining the harm piracy inflicts on American workers. “Many creative professionals, including those in unions and other collective bargaining organizations, depend on robust IP protection for their economic security, even though they are not typically the copyright holder,” the USTR notes in its report. “These workers earn pay and contributions to their health insurance and pension plans from the sales and licensing of the content they help create.”

Unfortunately, there’s relatively little hope that the USTR’s latest report will prompt a crackdown on counterfeit and piracy endeavors in China, but you can help support American manufacturers like those featured in our Made in America directory.