In the crowded alleyways of Southeast Asia’s cities, the trade in counterfeit goods—designer handbags, watches, electronics, and even medicines—continues to thrive despite mounting international pressure and legal crackdowns. The latest developments have put the region squarely in the sights of the United States, which is threatening punishing tariffs on countries it believes are complicit in the flow of illicit goods. These moves, while targeted at protecting intellectual property and domestic industries, risk triggering broad economic and social consequences across Thailand and its neighbors.
The flourishing counterfeit industry is emblematic of persistent challenges faced by the region. As detailed in investigative reporting by the South China Morning Post, open-air markets remain awash in fakes and replicas that mimic high-end Swiss watches and luxury brands, with smugglers and vendors adapting quickly to enforcement efforts. The trade is illegal, but culturally ingrained buying habits and the lure of bargain prices keep the underground economy vibrant (SCMP). The latest threat—imminent tariffs from the United States, set to take effect if trade negotiations fail—positions counterfeit trade not merely as a local law-enforcement issue, but as a linchpin in global economic and political dynamics.
For Thai readers, the significance is much deeper than headlines of diplomatic quarrels. Thailand’s economy is deeply connected to its neighbors through the intricate movements of both legitimate and illicit goods. Transshipment, where Chinese products are relabeled and routed through Southeast Asian countries to avoid direct US tariffs, has surged. The United States sees these practices as undermining its trade sanctions, leading to threats of tariffs as high as 49% on certain Southeast Asian exports. Thailand, acutely aware of the risks to its export-driven economy, has responded with new offers to reduce tariffs on US goods and additional commitments to strengthen intellectual property enforcement (Reuters; SCMP).
The counterfeit economy is not just an economic issue but presents complex risks to public health and consumer safety. According to the OECD, the global trade in fake goods reached an estimated USD 467 billion in 2025, accounting for around 2.5% of international trade (OECD). In Thailand, counterfeit goods are found in night markets, border regions, and increasingly through online marketplaces. These products range from fashion accessories to electronics, automotive parts, pharmaceuticals, and personal care products. Public health experts warn that fake medicines and substandard automotive components pose grave risks; a single faulty brake pad or ineffective antibiotic can have life-or-death consequences.
Despite their pervasiveness, counterfeit goods enjoy a certain social acceptance. Data from the European Union’s 2025 Counterfeit and Piracy Watch List highlights the popularity of these markets with both Thai consumers and international tourists, drawn by the exotic appeal of bustling bazaars and bargain finds (Rouse). Groups of foreign tourists can often be seen hunting for replicas in places such as Bangkok’s Chatuchak Market, while online sellers use encrypted messaging apps to reach customers beyond the markets’ reach. The Thai government, recognizing both the reputational and economic risks, has strengthened enforcement in recent months, targeting high-profile vendors and working with international agencies to disrupt supply chains (Thailand Locality Guide).
Internationally, brand owners—especially those of luxury products—apply relentless pressure on regional governments to step up anti-counterfeiting operations, and coordinated crackdowns are increasingly common. The Association of Southeast Asian Nations (ASEAN) has recognized that counterfeiting and piracy directly undermine the region’s development targets, as highlighted in a 2023 report by the Transnational Alliance to Combat Illicit Trade (TRACIT). The report found that the illicit trade reduces government tax revenues, harms legitimate local businesses, and jeopardizes consumer trust. Nevertheless, progress has been uneven. Open-air markets, street vendors, and border checkpoints remain porous, and the profit margins from selling fakes continue to attract both organized crime syndicates and informal entrepreneurs.
Experts and policymakers offer diverse perspectives on what it will take to counteract such a deeply-rooted trade. According to a senior official from the Thai Department of Intellectual Property, “Thailand is committed to addressing the concerns of our trading partners by intensifying enforcement and raising public awareness about the dangers of counterfeit goods.” Meanwhile, researchers from Chulalongkorn University have emphasized the need for a multi-pronged approach: “Legislation and enforcement are important, but consumer behavior and public understanding must also change. Young Thais must be taught the value of intellectual property from an early age.”
At the international level, US, EU, and regional officials continue to call for tighter customs inspections, better cross-border intelligence, and stronger penalties for offenders. However, legal efforts are often stymied by the technical sophistication of counterfeiters, loopholes in customs documentation, and sheer market demand. As a result, changes in consumer habits—encouraged through public campaigns and educational initiatives—are seen as an essential complement to enforcement.
Thailand’s strategic role in the regional counterfeit trade is due in part to geography and its position as a regional logistics hub. With porous land borders with Cambodia, Laos, and Myanmar, and major seaports such as Laem Chabang, the Kingdom is both a source and a transit zone for fake goods. In 2025, researchers found that Thailand, Vietnam, and Indonesia had seen a dramatic surge in Chinese exports—both legitimate and otherwise—diverted through their borders as US tariffs closed direct routes (Bangkok Post). Enhanced customs enforcement and border security operations can help, but such efforts must be sustained and regionally coordinated.
For the average Thai consumer or small business owner, the most immediate impact of the crackdown and the threat of tariffs may be felt in rising prices, trade disruptions, and restricted market access for local goods in the United States. The Bank of Thailand has already flagged the risk of reduced economic growth if US tariffs go ahead, though it expects the shock to be less severe than the pandemic’s downturn (Reuters). In the longer run, successful counterfeiting crackdowns could help strengthen Thai brands, improve international perceptions, and protect consumers from unsafe products—but these gains will require sustained investment and a “whole of society” approach.
Historically, Thailand and Southeast Asia’s major markets for counterfeits have reflected a complex relationship between law, livelihood, and cultural acceptance. Some small-scale market traders, interviewed for this report, point to the role that selling replicas plays in supporting family incomes—especially in the aftermath of COVID-19. “People come here looking for bargains,” said one market vendor in Bangkok’s Pratunam district. “We have to make a living, and these sales help us survive.” While the authorities look to build alternative economic opportunities for informal sector workers, abolishing the sale of counterfeit goods entirely remains a challenge.
Looking ahead, the future of Thailand’s counterfeit economy will likely depend on regional cooperation, technological investments in product authentication, and growing awareness of the personal and societal harms of consuming fakes. For example, pilot projects underway in Thailand, Singapore, and Malaysia are trialing blockchain-based verification for high-risk products such as pharmaceuticals and luxury cosmetics (OECD). Such innovation, paired with robust consumer education, could help stem the tide of counterfeiting while opening new pathways for Thai exports to meet the highest global standards.
For the Thai public, the actionable steps are clear. Buyers should exercise caution in markets and online, especially when purchasing products that could affect health or safety. Checking for product certifications, holograms, and QR codes linked to genuine manufacturers can reduce exposure to dangerous fakes. Thai entrepreneurs should look for opportunities in developing certified, value-added products that leverage the Kingdom’s trusted agricultural, craft, and design traditions. For policymakers, strengthening anti-counterfeiting laws, supporting informal sector transitions, and investing in public education about the risks of fakes remain urgent priorities.
In the end, the challenge of Southeast Asia’s booming counterfeit economy is a test of the region’s ability to modernize, cooperate, and protect both livelihoods and reputation on the global stage. The question is not just whether law enforcement can crack down on the trade in the short term, but whether the region can shift economic incentives, consumer attitudes, and governance to create a more sustainable and trustworthy marketplace for the future.