Archery molder says tariffs help fight Chinese counterfeiting

Washington — For Michigan molder Bohning Co. Ltd., the Donald Trump administration's latest proposed tariffs on Chinese imports would be a much-needed boost in its costly battle against product counterfeiting.

CEO Larry Griffith said his rural Michigan injection molder and extruder has been plagued by Chinese companies violating its intellectual property on its main products: bows, arrows and high-end archery equipment.

To try to stop that, the small company has spent several hundred thousand dollars wading into the Chinese legal system, going so far as to accompany Chinese police on raids against factories that export fake Bohning bows and arrows worldwide.

"If we didn't do something, we were going to be put out of business by people using our name, using our brands and basically stealing our identity," Griffith said. "We had very few choices."

Tariffs, he said, will help level the playing field for his company and protect jobs for the 41 employees at Bohning's Lake City, Mich., factory.

Griffith linked the two issues — business lost to Chinese IP theft and the need for tariffs — in written comments June 6 to the U.S. Trade Representative's office, and in a subsequent interview with Plastics News.

Archery products are part of the Trump administration's latest round of proposed tariffs, which call for 25 percent duties on $300 billion in Chinese imports.

With the on and off nature of trade talks between the two countries, including ongoing high-level discussions, it's not clear if the new tariffs will go into effect.

The tariffs drew sometimes strident opposition from many industry groups and companies during hearings in Washington that stretched from June 17–25, but others like Griffith were not taking any chances and urged the Trump administration to stick with its tariff plans.

Like so many situations on the ongoing trade battle between the U.S. and China, though, it can get complicated.

Other archery products makers and the industry's trade association lined up on the opposite side from Bohning, traveling to Washington June 18 to testify and urge the Trump administration to drop the tariffs.

The Archery Trade Association said that only a minority of archery and bowhunting gear sold in the United States is made domestically. China accounts for a "substantial" portion of equipment sold in the U.S. and dominates in the moderately priced market, ATA said.

ATA is very concerned that tariffs will jack up prices and lower sales for what is a very discretionary purchase, costing jobs at both small retailers and manufacturers, said Jon Syverson, an executive with archery equipment maker FeraDyne Outdoors LLC, who testified on behalf of the association.

"I'm afraid that archery retailers and consumers do not yet appreciate the magnitude in increased prices coming their way," Syverson said. "Many manufacturers like me will need to look for cost offsets, and their largest cost is labor, so they'll cut jobs. The global archery supply chain is complex, so there's no quick workaround for the increased prices caused by the tariffs."

But Griffith, who is a past chairman of the Archery Trade Association and one of its founding members, said Chinese counterfeiters have already cost his company sales.

In one 12-month stretch in 2017 and 2018, for example, sales to Australia — one of its main export markets — dropped 50 percent as fake Bohning products flooded in.

The company began investigating, and after some complicated detective work it was able to trace the counterfeits back to several factories in China.

It decided to get aggressive. It hired a Chinese law firm and local investigators to gather proof that those counterfeit goods were in fact in those factories and passed that information to local police.

Of equal importance, he said, Bohning also hired lawyers to secure protection for its trademarks and its name in China, a costly process that took two years but is legally necessary to enforce IP there.

It culminated in Griffith traveling to China in early April for the raids. Chinese police needed a company expert who could help identify the counterfeit goods.

"The local police had the right documents," he said. "They could see that we owned the trademarks. They executed the search documents, and then at all three of the sites we raided, we were able to find a lot of counterfeit products."

The plan worked, even with, as Griffith described it, the police worried about trouble during the raids: "The potential for violence is relatively high."

He said Bohning decided to target the counterfeiters after learning in 2017 about changes in Chinese laws that would help his company, and he praised Chinese law enforcement.

"The Chinese police that we dealt with were exceptionally professional," he said. "There was not a bias against me or my company as Americans. They were very courteous. They were professionals."

But even with the IP success, Griffith said he still believes tariffs are needed.

His company is in the early stages of selling its archery equipment directly into China — it's a popular hobby there — and he said a U.S. company has more hurdles than if a Chinese competitor wants to enter the U.S. market.

He said it's an "arduous" legal and bureaucratic process for his firm to get permission to sell in China, including securing IP protection that Chinese competitors would obtain much easier in the United States.

"From a reciprocity standpoint, let's level the playing field," he said. "If a Chinese company can come and sell in the United States, I have no problem with competition. It makes me better.

"But when I want to go to China and sell directly to them, I don't need to have to fight the Chinese government," he said. "The Chinese government has such a set of hoops we have to go through to make this happen."

Bohning's IP efforts have included a lot of online work as well. Over the last 15 months, he said the firm has focused on e-commerce sites and targeted vendors selling fake Bohning equipment.

Many e-commerce sites require the vendor to list where the equipment is made, and since none of those Bohning products were made in China, that allowed the company to target vendors who listed them as Chinese-made Bohning bows and arrows, he said.

"I think we ended up shutting down about 1,200 sites that were selling to the United States, our products using our trademarks, using our name, and the money was going to China," he said.

In his written comments, he said the ATA's opposition to tariffs is a "slap in the face" to U.S. manufacturers.

In its comments, the archery association did not address product counterfeiting issues in China, and ATA President and CEO Matt Kormann said the group would not comment beyond its written filings and testimony.

It largely made economic arguments to the USTR, saying that tariffs would be potentially devastating to the small retailers and manufacturers in the industry.

"A 25 percent tariff is not something we can simply absorb," said Syverson, chief commercial officer at FeraDyne Outdoors, a 320-employee manufacturing firm in Superior, Wis. "We have low margins. We will have to raise prices, but with many purchase orders from retailers already in place, this will not be easy."

He told the USTR that he believed tariffs will lead some archery retailers to simply close, as consumers put off purchases.

Syverson argued that tariffs on archery equipment will do little to help with the Trump administration's overall policy goals of forcing changes in Chinese industrial policy and in balancing trade.

China exports about $50 million a year of archery goods to the United States. While that accounts for a significant share of the U.S. archery equipment market, it's a miniscule piece of the $300 billion in Chinese goods targeted for tariffs, ATA said.

"The proposed duties will accelerate declines for the archery industry," Syverson said. "It will have little or no impact in convincing China to change its ways. Less than $50 million of archery imports from China is incredibly small compared to the $300 billion of annual China imports proposed for new duties."