Alternatives to Tariffs: Part One

 

Editor’s note: this is the first in a two-part series

 

My coworkers at Confer Plastics and I are in the trenches of the global trade wars. Literally every day, we are competing against Chinese manufacturers that copy our products. The marketplace here in the States holds quite a few lookalikes of our swimming pool products and there is a growing number of knock-offs of our hot tub steps – in just the past two years alone, nine of them have appeared.

 

To keep that competition at bay we devote a lot of time, energy, and money into protecting our products, place in the industry, and people. We investigate every new product that looks similar, issue cease and desists to retailers carrying definite infringements, engage our legal representation on a regular basis, and put a princely sum of money into developing and locking up our intellectual property in its various forms.

 

You would think that would make me the poster child for tariffs; after all, those added costs could be a deterrent to the overseas scoundrels and scofflaws and the domestic distributors who put their products into US markets.

 

That’s not me.

 

I hate tariffs.

 

Tariffs add to the cost of living because the foreign producers and their networks here aren’t going to eat the charges, they are going to pass them on to their US consumers. In this era of endless and frustrating inflation, I don’t want to see my customers – who are decidedly middle class – or any family losing their purchasing power to this propagandized, incognito form of taxation. Many of those consumers adore tariffs because the government has them believing they are sticking it to the outsourcers, importers, and bad guys, when, in reality, it’s they who are being penalized.

 

It’s especially maddening when tariffs are thrown around indiscriminately and applied to everything -- as President Trump has threatened to do -- including things our economy is incapable of making in the volume we need or at all, such as Canadian aluminum and energy, or Mexican produce that keeps our nation fed outside of our growing seasons. The burden becomes inescapable and indisputable. You can’t temper an increasingly higher cost of living by only adding to it. It’s no different than his predecessor, President Biden, jacking up the duty on Canadian softwoods used in construction to nearly 15% while also saying there’s an affordable housing crisis in the United States.

 

I would prefer that our federal government abandon tariffs and instead work on foreign and domestic policies that make US-based mining, manufacturing, and agriculture more attractive and more affordable.

 

I have many suggestions to make that so, but I’ll limit it to my Top Five. This week I’ll address two of those ideas, with a focus on intellectual property.

 

Create an international culture around intellectual property.

 

Why do Chinese producers so shamelessly copy products and engage in corporate espionage? It’s because they are indifferent to the value and importance of intellectual property. Protecting and preserving designs, copyrights, trademarks, and trade dress is of little interest to them likely due to cultural issues: By living under numerous communist philosophies and dictates they devalue the individual – and there’s nothing more individualistic than ideas.

 

Rather than expending so much effort in creating friction with our nation’s third largest trading partner, federal officials should find ways to temper the sources of frustration with that relationship and develop a universal understanding and appreciation of IP and a protective framework around it.

 

Provide IP support to the little guys.

 

As a mid-sized business we have the resources -- and the hunger, knowledge, experience, and outside partners – to fight infringements, every one of them, and develop armor for our goods beginning at the earliest stages of product development.

 

Smaller businesses aren’t in that position. Maybe they don’t have the revenues. Maybe no one has ever educated them on how to do it. Maybe they aren’t aligned with good legal representation. Maybe they don’t believe their idea is unique. Maybe they don’t have the time.

 

Whatever their reasons may be, we need to remove the obstacles – and the threats, foreign and domestic -- that could inhibit their business’s growth.

 

My suggestion is that the federal government go one of two routes. One, empower the US Patent and Trademarks Office to create a consultation or legal service that will engage small manufacturers in all phases of IP and help them develop, file, and maintain it. Or, two, allow smaller manufacturers to get substantial grants that would apply to the utilization of outside legal services in the protection of IP. Under both scenarios, I believe a threshold for annual revenues should be $5 million because it’s the little guys who need the help in fighting knockoffs so they can one day become the big guys.

 

In next week’s column, I’ll look at three other alternatives to tariffs in hopes of keeping those surcharges away while still emphasizing the competitiveness of America’s makers of things.  

 

 

From the 25 January 2025 Greater Niagara Newspapers and Wellsville Sun