Beware of Defective Imports

 

Imagine you're a small retail tire business that purchases tires from a manufacturer overseas. One of your customers buys what turns out to be a defective tire from your store. Are you at fault, even though you didn't make or alter the tire? The answer could be yes.

 

Just ask Foreign Tire Sales (FTS) of New Jersey. That family-owned small business is facing bankruptcy after being named in a wrongful death case in a New Jersey federal court. FTS has sued the tire manufacturer, Hangzhou Zhongce Rubber of China, but the manufacturer insists that its tires meet U.S. safety standards.

 

With new questions arising about the safety of imports, including pet food, toothpaste, and children's toys, small businesses that sell these and other products are at risk of being targeted in product liability cases. Under current law, companies can be held liable for selling a dangerous product even if they don't know it was compromised.

 

"If you are a company importing a product with a safety component to it, and the price from an unknown source overseas seems too good to be true, there is a greater chance that the product may be substandard or counterfeit," says Jeremie Waterman, senior director for the U.S. Chamber's China Division.

 

A Chamber-endorsed bill in the House of Representatives would protect lawful sellers from certain types of liability in cases arising out of an accident involving the seller's product.

 

In the meantime, Waterman recommends that sellers of products that have a health or safety element know their supply chain, invest in quality control, and, to the extent possible, verify the quality and safety of the key components.

 

To learn more about supply chain security, go to www.thetruecosts.org/.