Something Fishy in Trade Dollars

While U.S. and Chinese officials huddled in Washington in recent days on big trade and global finance issues, there’s plenty of small trade frictions that point to another problem.

Reader Alert: If you are a history buff, seafood lover or have a thing for fine handbags, you may want to brace yourself before continuing.

Customs agents in Chicago last month seized a shipment of what’s supposed to be a collectors’ coin category called U.S. Trade Dollars. Those beautiful silver coins were minted under an act of Congress from 1873 to 1878, and apparently a lot of them ended up in China way back when.

But the 361 coins bound for an Illinois residence were brass with a thin silver plating, and a federal official said “legitimate traders were being duped.” One person’s dream of a fortune from Web auctions turned out to be plugged nickels.

Over in Boston on April 8, a federal jury convicted a Quincy, Mass., fish dealer of mislabeling pollock from China as cod loins from Canada, which fetches a higher price per pound. Beyond the $8,000 in fishiness for that Lacey Act violation, the jury convicted him for violating another law to mislabel $203,000 in fish – mostly sole -- as products of Canada, Holland, the U.S. and Namibia. All of it actually came from China, and buyers never got a chance to consider the source before biting in.

Last year, a Richmond, Va., jury convicted two New York importers for bringing in huge hauls of fake luxury handbags and wallets in container shipments. It was one of the biggest counterfeit cases ever of luxury goods and displaced about $100 million in legitimate goods from such names as Gucci, Fendi, Chanel and Burberry, the Justice Department said.

Taken alone, each case could be a small thing in the vast trade flows that make up the U.S.-China relationship. Certainly none ranks up there with dollar-yuan exchange rate policy or China’s latest snug of bank lending that can slow its heated economy, cool commodity prices worldwide and perhaps slow trade growth as well.

But the cases cited here are only a few examples, and there are enough like these to suggest a pattern in trade that needs special attention. Let’s hope the ongoing trade talks sweat some of the small stuff, too, and stanch some of the fakery in goods trade out of China instead of just waiting for U.S. officials to catch ’em if they can.

-- Contact John D. Boyd at jboyd@joc.com. Follow him on Twitter @jboydjoc.
 

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