Tariffs and IP: An Unintended Collision

Intellectual property (IP)—including patents, trademarks, copyrights, and trade secrets—remains a key driver of innovation and competitive advantage for American businesses. But in today’s global trade environment, especially following the tariff measures introduced during the Trump administration, protecting and managing IP has become more complex.

As companies adjust to shifting trade policies and evolving global supply chains, IP has taken on renewed strategic importance. For legal advisors and business leaders alike, understanding how tariffs impact IP rights and enforcement is essential to maintaining growth, profitability, and resilience.

How Tariffs Impact Intellectual Property

Tariffs—particularly those introduced in recent years on Chinese imports and other key goods—have created ripple effects that go far beyond pricing. For companies relying on international manufacturing, tariffs have increased operational costs and disrupted long-standing supply relationships.

What does this mean for IP?

• Increased counterfeiting: As legitimate products become more expensive, counterfeit goods often flood the market to meet demand. This puts trademarks and brand integrity at greater risk.
• Disrupted licensing: Tariffs can make cross-border licensing agreements less viable, especially when pricing or royalty structures are impacted.
• Enforcement uncertainty: Constant shifts in trade policy create a less predictable legal environment, making long-term IP protection and planning more difficult.

These challenges aren’t just legal—they’re strategic. And they call for a coordinated response between business and legal teams.

Practical Strategies for Businesses and Their Legal Advisors

To stay ahead, companies should consider the following proactive measures:

1. Reevaluate Your Supply Chain through an IP Lens

If you’re moving production to countries with more favorable trade agreements—such as Mexico or Canada under the USMCA—ensure your IP rights are registered and enforceable in those new jurisdictions. Legal teams should conduct jurisdiction-specific IP audits to avoid exposure.

2. Strengthen IP Enforcement and Counterfeit Prevention

With counterfeit risks on the rise, businesses should work closely with customs authorities and legal counsel to monitor infringement. Tools like digital watermarking, blockchain-based product tracking, and routine market surveillance can provide added layers of protection.

3. Review and Adjust Licensing Agreements

Legal teams should reexamine existing contracts for clauses that may be impacted by tariffs—such as royalty adjustments, exclusivity terms, and termination triggers. Renegotiation may be necessary to preserve the intended economic value.

4. Monitor Policy Changes and Advocate When Possible

Staying up to date on trade and IP policy changes from the Office of the U.S. Trade Representative (USTR) can reveal important opportunities—such as tariff exemptions or new enforcement mechanisms. Businesses may also benefit from participating in industry associations that track and influence trade policy.

5. Invest in Domestic Innovation

One long-term hedge against tariff uncertainty is investing in U.S.-based R&D. By creating products that can be manufactured domestically and protected through U.S. IP law, companies reduce their exposure to import costs and reinforce their brand in the domestic market.

The Bottom Line: IP Is a Business Asset, Not Just a Legal Issue

Tariffs may have been designed to protect domestic industry, but they’ve also placed new pressure on the way businesses manage intellectual property. Rising costs, disrupted partnerships, and increased infringement risks make proactive IP planning more important than ever.

For businesses and legal advisors, the key takeaway is clear: IP strategy must now account for trade policy realities. By aligning legal protections with supply chain decisions, licensing models, and innovation investments, companies can not only weather the current trade climate but emerge stronger and more competitive.