On 29 May 2026 the Office of the US Trade Representative opened a Section 301 investigation into Vietnam, citing the country's "persistent failure" to fix long-standing intellectual-property problems: online piracy, counterfeit goods, weak border enforcement, unlicensed software, and signal theft (USTR, 29 May 2026). Section 301 is the same statute, the US Trade Act of 1974, that the first Trump administration used to open the China tariffs in 2018. The USTR already runs two separate Section 301 cases against China. Vietnam was named a "priority foreign country" in the 2026 Special 301 Report in April, and the public comment window on the new probe closes 2 July 2026 (Supply Chain Dive, 29 May 2026). A probe like this does not always end in duties. Every recent round of China duties started exactly here.
Why this lands on importers who left China for Vietnam
Vietnam became the default China-plus-one destination for a clear reason. When US tariffs on Chinese goods spiked past 100% in 2025, moving final assembly across the border looked like the way out. The trade data shows how far it ran. Vietnam exported about $132 billion to the US while its own imports from China surged to roughly $174 billion in the year to May 2025 (ING, 3 July 2025). China's shipments to the US fell about $51 billion last year, and imports from a group led by Vietnam, India and Mexico rose roughly $49 billion to fill the gap (Bloomberg, 30 March 2026).
That surge is what put Vietnam in Washington's sights. The July 2025 US-Vietnam deal already set two rates: 20% on genuine Vietnam-origin goods and 40% on "transshipped" goods, meaning Chinese product passed through Vietnam without real processing (ING, 3 July 2025). A Section 301 IP case now stacks more pressure on a country that already carries the administration's largest single-country trade deficit.
A Vietnamese address is not a Vietnamese supply chain
The exposure sits in the country-of-origin rules. Origin is decided by substantial transformation, a customs test of how much real work actually happens in a country. Where the final box gets sealed has nothing to do with it. Researchers at Harvard, Duke and Academia Sinica found more than $8 billion of Chinese goods were rerouted through Vietnam to the US in the first three quarters of 2025, much of it passing through "without substantial transformation or value added" (The Diplomat, 31 January 2026). Bloomberg's customs-level analysis found Vietnamese plants that screw together Chinese components sometimes added under 8% of the export value (Bloomberg, 30 March 2026).
If your Vietnam supplier is a Chinese-owned shop doing light assembly on Chinese parts, you are holding two problems at once. You face the 40% transshipment rate and US Customs enforcement under the Enforce and Protect Act if the origin claim does not hold up. You also still carry every supplier risk that made you verify factories in China in the first place, including the counterfeit-component and IP exposure the USTR just put Vietnam on notice for.
What to check before the next order ships
Find out who actually owns the factory, not the name printed on the quote. Establish what real value is added on Vietnamese soil and where the components come from. Confirm the supplier can document substantial transformation if US Customs asks, the same way a bill of materials and a production process have to stand up for any origin claim. A country swap just relocates the work of verifying a factory to a new address.
The IP and counterfeit concerns the USTR flagged in Vietnam are the same risks that need eyes on the ground in any factory. Verification is the same discipline whether the carton ships from Shenzhen or Bac Ninh. Our guide to verifying a Chinese supplier covers how to pin down ownership and real production, and if you are weighing duties on the EU side, anti-dumping duties on Chinese imports run on the same importer-pays logic.
Where Mila Sourcing fits
A transshipment surprise traces back to one gap: not knowing who really makes your goods and where the value is added. That is the first thing a Mila agent settles on the ground before any deposit moves: the producing factory, who owns it, the components that go into the build, and the export company on your customs paperwork, written into a bilingual contract. Sourcing Activation covers the verification, and Full Production Management holds the paper trail across every shipment.
Earlier in the process? Supplier sourcing in China and how to find reliable suppliers in China cover the steps before the origin question lands.
Sources: USTR, Section 301 investigation of Vietnam, 29 May 2026; Supply Chain Dive, USTR initiates Section 301 probe of Vietnam, 29 May 2026; ING, assessing the US-Vietnam trade deal, 3 July 2025; Bloomberg, how Trump's tariffs altered supply chains, 30 March 2026; The Diplomat, inside China's rerouted supply chains, 31 January 2026.