Trump Comes Down on Counterfeit Goods

In a profound move, President Trump says the United States will withdraw from a 144-year-old postal treaty allowing steep postal discounts for Chinese manufacturers and counterfeiters who flood U.S. markets with cheap counterfeit, fake and replica goods.

Accordingly, the president does not need congressional approval to withdraw because the last version of the treaty was never put up to a vote. However, it may be a one-year process per UN rules.

White House numbers say that a one-pound package that costs the U.S. Postal Service about $10 to $15 to deliver can be mailed from China First Class for just $2.50. Basically, it’s cheaper to send packages from China than across the street.

Note that this costs the postal service about $170 million last year, while subsidizing China’s sellers and driving U.S. retailers and manufacturers out of business.

The goal is that this should severely disable Chinese counterfeiters and dishonest sellers using e-commerce websites, including eBay Amazon and Alibaba, from mailing an enormous amount of counterfeit goods to unsuspecting buyers in the United States.

In terms of the numbers, 80% of eBay sales and 50% of Amazon sales are from global “Marketplace” sellers, including an inexhaustible supply of counterfeits and replica products to unsuspecting U.S. consumers.

One of the largest trades in the world is counterfeiting and pirated goods, and it is forecast to grow to $2.8 trillion and cost 5.4 million net job losses by 2022, according to a 2017 International Chamber of Commerce Report.

China is the world’s largest online retail market, producing over 90% of global counterfeit goods. Chinese companies now account for about 60% of packages shipped into the United States.