What is the ruling on supplying raw materials to a manufacturer who persists in cheating and claims that his product—of lower quality—is of high quality? Is it permissible to sell to these manufacturers, despite the prevalence of this type of cheating, and knowing that others will sell to them if I refuse?

What the seller does in terms of deception and lying is a grave major sin. The Prophet, peace and blessings be upon him, disavowed deceivers, and lying leads to wickedness and entry into Hellfire. Markets are detested by Allah due to the abundance of deception, fraud, and false oaths within them.

There is no harm in selling to such a manufacturer if the sale is legitimate and the commodity is permissible. The burden of the lie falls upon him, not upon you. You should advise him to fear Allah and warn people about the counterfeit goods if he persists in his deception, and this is considered good counsel for Muslims.