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Burdened by Knockoffs, Shoe Industry Cheers Trump’s Crackdown on Counterfeiters

Industry leaders are praising President Donald Trump’s move to curb the sale of fake goods on the internet, putting pressure on e-commerce giants, including Amazon.

The Footwear Distributors and Retailers of America and the American Apparel and Footwear Association were upbeat on a report released Friday by the Department of Homeland Security. The 54-page memo outlined the government’s suggestions to combat trafficking in counterfeit and pirated products that officials say impacts American innovation, hurts traditional brick-and-mortar retailers and erodes competition for U.S. manufacturers and workers.

“We appreciate the administration’s efforts to fight the surge of counterfeit footwear entering the U.S.,” FDRA president and CEO Matt Priest told FN. “We face unprecedented challenges as an industry when it comes to protecting our intellectual property, as bad actors continue to use popular e-commerce sites to target unsuspecting consumers.”

Apparel and footwear companies spend hundreds of millions of dollars each year to manufacture, produce and ship merchandise to Americans. According to a Better Business Bureau report published in May, customs officials said that footwear ranked among the top three categories of counterfeit items that were seized in 2017, the latest data available. Apparel and accessories as well as watches and jewelry completed the list.

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“This is about more than just lost sales and damaged brand reputation,” said AAFA president and CEO Steve Lamar. “Counterfeit products that are unknowingly purchased — whether a winter coat for yourself or pajamas for your newborn — can put Americans in direct contact with materials that do not meet federal safety regulations, support unsafe working conditions or enable illegitimate factories to ignore sustainable best practices. It is past time that we attacked this pervasive problem head-on.”

The rise of online shopping platforms has led to a flood of fake goods entering the U.S. Despite having their own policies against counterfeit and pirated products, e-commerce leaders Amazon and eBay have found themselves unable to police all third-party marketers nor eradicate the sale of illicit goods and cheap knockoffs on their sites.

“Historically, many counterfeits were distributed through swap meets and individual sellers located on street corners,” the DHS wrote. “Today, counterfeits are being trafficked through vast e-commerce supply chains in concert with marketing, sales and distribution networks.”

In its report, the organization announced that law enforcement will begin seeking out cases of fake items and will use “all available statutory authorities to pursue civil fines and other penalties against these entities.”

The initiative was led by the White House and Customs and Border Protection and comes just weeks after President Donald Trump and Chinese President Xi Jinping signed a landmark “phase one” trade deal, in which Beijing promised to take steps against counterfeiters as it faces the risk of new tariffs.

It also comes less than two months after Nike, Wolverine Worldwide, Columbia Sportswear and Deckers Brands joined the FDRA in applauding the introduction of the Counterfeit Goods Seizure Act of 2019 in Congress. The bipartisan bill would give Customs and Border Protection more tools to remove enforcement loopholes that have allowed counterfeiters to ship identical-looking products without trademarks and attach them after the items clear customs.

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