Tariffs are driving more counterfeit sales. Here's what brands need to know.

Tariffs have dominated the business conversation for two years now — supply chain rerouting, repriced SKUs, squeezed margins. Most brands are focused on the direct cost impact. But there's a second-order effect that isn't getting nearly as much attention: the current tariff environment is creating conditions that counterfeiters thrive in. As legitimate prices rise, cheaper alternatives become more attractive and we’re seeing a significant uptick in counterfeit activity as a result. 

Three dynamics are at play: 

• More counterfeits are being caught at the border. The end of de minimis means every package now faces customs scrutiny, and seizures have been up significantly 

• Supply chain disruption is creating enforcement blind spots. Brands racing to find new suppliers and reroute logistics are opening gaps that counterfeiters then exploit. 

• Consumer price sensitivity is elevated. As legitimate prices rise, shoppers become more willing to seek alternatives and counterfeiters are positioned to meet that demand. 

Before diving into each effect, it helps to understand how we got here.

The Tariff Landscape: A Quick Primer

The tariff situation has shifted significantly over the past year, and the legal landscape is still settling. Here's where things stand: 

Section 232 tariffs target specific products deemed to impair national security. These apply to steel, aluminum, copper, automobiles, auto parts, and timber/lumber. They remain in effect and aren't going anywhere.

Section 301 tariffs address unfair trade practices and apply to specific countries or products. The tariffs on Chinese goods from Trump's first term are Section 301 tariffs. These also remain in effect, and USTR has launched new Section 301 investigations into manufacturing capacity issues affecting China, the EU, and over a dozen other countries.

IEEPA tariffs - the "reciprocal tariffs" and "fentanyl tariffs" that dominated headlines in 2025 - were struck down by the Supreme Court in February 2026. The Court ruled 6-3 that IEEPA does not authorize the President to impose tariffs. The government collected an estimated $166-175 billion under these tariffs before they were invalidated, and refund mechanics are still being worked out.

Section 122 tariffs are the immediate replacement. On February 20, 2026, the same day as the Supreme Court ruling, Trump imposed a 10% global tariff under Section 122. These are temporary by design - they expire after 150 days (July 24, 2026) unless Congress approves an extension. The administration has signaled it may increase the rate to the 15% statutory maximum.

De minimis elimination survives the IEEPA ruling. The suspension of duty-free treatment for sub-$800 shipments was not IEEPA-based, so it remains in effect for all countries.

The net result: the tariff regime is in flux, but tariffs aren't going away. Section 232 and 301 tariffs remain, Section 122 is active through at least July, and new investigations are underway that could lead to additional duties. For brands, this means continued cost pressure - and continued conditions that benefit counterfeiters.

Effect 1: The End of De Minimis Is Catching More Counterfeits

The elimination of the de minimis exemption is significant and worth understanding in full.

Until August 2025, any shipment valued under $800 could enter the U.S. essentially duty-free and with minimal customs review. At its peak, U.S. Customs and Border Protection was processing over 4 million of these shipments per day. Because they required so little documentation, a 2023 House report found that over 60% came from China with very little visibility into their contents.

That exemption is now gone for all countries — it had already ended for China and Hong Kong in May 2025. Every shipment now requires a full customs declaration and applicable duties. Since the change, the volume of sub-$800 parcels entering the U.S. has dropped 54% according to the Universal Postal Union.

The enforcement results are tangible. CBP has collected over $1 billion in duties on more than 246 million low-value parcels since the change took effect. Seizures of unsafe and non-compliant low-value goods - including counterfeits - have increased 82%.

More packages going through formal customs channels does mean more scrutiny and more opportunities to catch counterfeits at the border. That's a genuine win for brand enforcement.

The complication is that counterfeiters adapt quickly. Enforcement experts are already tracking a shift toward routing shipments through third-party countries with less oversight, breaking large orders into smaller parcels, and moving toward domestic fulfillment using inventory that was bulk-imported before the change took effect. The border is tighter — but the online marketplace problem, where the majority of counterfeit sales actually occur, isn't meaningfully addressed by customs policy alone. 

Effect 2: Supply Chain Disruption Creates Enforcement Gaps

There's a second dynamic that often gets overlooked. Tariff-driven supply chain disruption creates enforcement blind spots.

When brands are racing to find new suppliers, source from new regions, or launch products on compressed timelines to get ahead of tariff changes, oversight gaps open up. Those gaps are exactly what counterfeiters look for.

The most common entry points during supply chain instability:

• Factories under cost pressure running unauthorized overproduction

• New marketplace channels launched without enforcement coverage in place

• Fragmented distribution that's harder to monitor in real time

OECD research estimates that brands lose up to 10% of revenue to counterfeits on average. Layered on top of tariff-driven cost increases, that's a compounding margin problem — and one that often goes untracked until it's already significant.

Effect 3: The Price Sensitivity Problem

Tariffs function as an import tax on legitimate goods. When your landed cost goes up, your prices follow. The Federal Reserve tracked tariff passthrough to consumer retail prices throughout 2025 and found it was real and sustained - imported core goods prices rose meaningfully above prior-year comparisons.

The issue isn't that tariffs make counterfeits cheaper. Counterfeiters can set whatever price they want. The issue is that tariffs make legitimate products more expensive at exactly the moment consumers are least willing to absorb price increases.

A Simon-Kucher study tracking U.S. shoppers throughout 2025 found that price sensitivity remained elevated and that consumers became quicker to question price increases as the year went on. Separately, only 19% of Gen Z consumers say U.S. product origin factors into their purchasing decisions. The audience most likely to find your brand through TikTok is also the least likely to prioritize authenticity when your prices rise.

Research from the International Coalition Against Illicit Economies found that higher tariffs consistently act as a catalyst for counterfeiting - not because they change what counterfeiters charge, but because they widen the gap between what consumers expect to pay and what brands can offer. Counterfeiters exploit that psychology.

Where Exposure Is Highest

Not every brand faces the same risk profile, but a few categories stand out.

Apparel and footwear are among the hardest hit by tariff-driven price increases. Current estimates put short-run shoe price increases around 40% and apparel around 38% under current tariff levels. These are also among the most heavily counterfeited product categories globally.

Viral D2C brands are structurally exposed because counterfeiters can spin up fake sites and marketplace listings within hours of a product launch. When that product's real price is rising due to tariff pressure, the fake becomes a more compelling alternative faster than it would in a stable pricing environment.

Brands with meaningful exposure on Chinese marketplaces — Temu, DHgate, AliExpress — are navigating additional complexity. These platforms were the primary beneficiaries of de minimis, and their volumes have dropped sharply since the exemption ended. But counterfeit inventory already in the pipeline, or being rerouted through alternative fulfillment channels, is still moving.

The Bottom Line

Tariffs aren't going away, and the policy environment isn't stabilizing soon. Consumer price sensitivity is staying elevated, and the window for price increases is narrowing. That's the market your brand is selling into, and the same conditions making counterfeits a more attractive option than they were 18 months ago.

Brands that were managing counterfeit activity manually, or deprioritizing enforcement because margins were healthy, are now facing a materially worse problem: higher counterfeit exposure at the exact moment there's less margin to absorb the revenue loss. The math has changed.

Every fake listing taken down is revenue that stays with your brand. Every counterfeit domain removed from Google is a customer who finds the real thing instead.

Get in touch with the Podqi team to see what enforcement coverage looks like in practice.