Here’s the situation: you’re the leader of a country that does business with the U.S. Do you have any trade war options other than retaliatory tariffs?
You betcha.
Alternative Trade War Tactics Beyond Tariffs
Consider the case of Russia. After Russia’s 2022 invasion of Ukraine, Western nations imposed multiple sanctions against Russia. Many Western businesses curtailed Russian operations or left the country entirely.
How Russia Used IP Retaliation After Sanctions
Among Russia’s response was Decree 299, providing that patent owners associated with ‘unfriendly’ countries would receive no, as in zero, compensation for the use of their patents in Russia. Think mRNA technology used to develop Covid-19 vaccines. Think power production patents owned by General Electric. Think patents owned by Toyota, Siemens and others.
Decree 299: Free Use of Patents from ‘Unfriendly’ Nations
The decree allowed free copying of the patented products and processes with no compensation to the patent owners.
Other limitations on the rights of foreigners were not as obvious.
Trademarks and the Peppa Pig Case
A Russian court dismissed a trademark infringement action brought by the English owners of the Peppa Pig brand, based on Western economic sanctions.
Why IP Retaliation Hurts the U.S.
Retaliation against intellectual property rights, including patent rights, provides an avenue for our trading partners to respond to U.S. tariffs. While the U.S. experiences a trade deficit in goods, the U.S. also has a substantial trade surplus in services and foreign investment.
U.S. Trade Surplus Relies on IP and Services
The U.S. trade surplus for services in 2024 was $293 Billion, up 30% in two years. A significant portion of the value of U.S. services exports is U.S. intellectual property. Those are areas in which the U.S. is acutely vulnerable to retaliation in the current trade war.
— Robert Yarbrough, Esq.