A few months ago, TEIL covered the ongoing trade relationship between the United States and China. Back in November - speculation lead many political sciences to suspect a trade war with China. Late in the year, President Trump met with Chinese advisors to try to come to some sort of agreement - the results of which until recently - were unknown to the public. Though the nature of the engagement has changed - our predictions stand strong. 

It was predicted that an all-out trade war would erupt between the U.S. and China. Instead, on January 15th, the United States and China signed a Phase 1 Deal, but a lot of people are concerned about what it will mean for international traders in both countries. According to the National Law Review, the existing Tariffs for goods on List 4A would be reduced from 15% to a mere 7.5% by Valentine’s Day. 

China, too, has imposed some tariffs - but there is no information thus far on exactly when this will happen - though it is said to be a necessity. 

The “Phase 1” deal goes into depth on some major trade issues including the transfer of technology, financial services, and IP. Other issues include Macroeconomic policy, exchange rate, policy, bilateral evaluation and dispute resolution - all hot button issues in the current financial and social climate. 

As we focus on IP - were most curious about Chapter 1 of Phase 1. Chapter 1 involves the interests of many of you importing and exporting with China. 

New enforcements are coming about regarding piracy and counterfeiting on E-Commerce platforms. Whereas before counterfeit goods had to have the mark in question removed - or had to be exported - they now must be completely destroyed. The Chinese government is also taking it’s own measures to protect against copyright infringement including the increased designation of an anti-piracy taskforce to “inspect, detain, seize, and execute customs enforcement authority against pirated goods”.  

What does this mean for businesses importing and exporting? What should we do?

As predicted in an earlier edition of our newsletter referencing trade with China - now more than ever you must ensure that your imports are coming by way of reputable companies and that nothing you are importing is in any way involved with, participating in, or facilitating the infringement of Intellectual Property or trade secrets. As the trade deal progresses, the crack-down on those transporting goods infringing on Intellectual Property grow increasingly more severe as oversight increases. If your business depends on the import of foreign goods - it’s best to research the origins and marks associated with brands you import to avoid having to start from scratch when your merchandise is destroyed at customs. 

Not sure how to go about the process of auditing your trade relationships and agreements? Afraid of guilt-by-association? Not sure what your existing contracts protect you from? Give us a call at + 708 531 1740 to take advantage of our no-cost consultation to learn if you’re at risk to lose money in the Phase 1 deal with China. 

Thanks for reading and for keeping up with the latest in business law, and intellectual property news. Want more? Visit us on the web, and follow our podcast TEIL Legal Minutes on Spotify & Apple Music here.