The reprieve for Vietnamese exporters following the February 2026 U.S. Supreme Court ruling was short-lived. While the unconstitutional IEEPA duties are being dismantled, and the manner to return the illegal tariffs constructed, a new, more calculated tariff regime has been introduced.
Vietnam is one of the primary targets of U.S. reciprocal trade policy due to the large trade imbalance. Much of the documentary trade imbalance between the U.S. and Vietnam rests on the belief that producers and exporters from Vietnam are Vietnamese in name only, and that in fact they are Chinese producers located in Vietnam.
To protect their margins in the U.S. market, Vietnamese manufacturers must look beyond the factory floor and become trade compliant.
The New Threats: Section 122 Surcharge and Section 301 Investigations
The termination of IEEPA tariffs has not brought a return to business as usual. Instead, the tariffs have been replaced by two sophisticated statutory measures that continue a climate of uncertainty:
- Section 122 Surcharge: Parallel to the removal of IEEPA duties, a new temporary import surcharge under Section 122 of the Trade Act of 1974 went into effect. This measure applies a flat 10% duty on nearly all products from all countries and is authorized for 150 days. This measure is seen as a balance of payments tool and the duty could scale up to 15%.
- Section 301 Investigations: The U.S. Trade Representative (USTR) initiated two extensive investigations under Section 301 of the Trade Act of 1974, both of which heavily feature Vietnam as a primary target. These investigations are widely understood as strategic moves to implement permanent, country-specific tariffs to replace the recently invalidated IEEPA duties.
- Structural Overcapacity: This investigation alleges that Vietnam and 15 other key trading partners have developed structural excess capacity, leading to overproduction and persistent trade surpluses that burden U.S. commerce.
- Labor Enforcement: This second investigation targets over 60 economies, including Vietnam, regarding the alleged failure to effectively prohibit the importation of goods produced with forced labor.
The conclusion of these investigations carries the potential for new, country-specific tariffs designed to address their findings. The measures are expected to serve as a successor to the temporary Section 122 surcharge.
Proactive Defense
To survive this high-tariff environment, Vietnamese firms are moving away from reactive measures toward sophisticated legal and logistical strategies.
Strategic “Tariff Engineering”
This often involves redesigning products to move them into lower-duty classifications. A classic case is a branded shoemaker. It reduced import costs by adding a thin layer of material to over 50% of its outsoles. It successfully reclassified the product from athletic footwear (taxed up to 37.5%) to ‘house slippers,’ which carry a much lower rate of 3% to 12.5%, without altering the shoe’s creative redesign.
Vietnamese manufacturers can use similar strategies by collaborating closely with U.S. partners during the design phase to optimize tariff classifications and enhance market competitiveness.
The “First Sale” Valuation Structure
This is an existing legal strategy that allows U.S. customs duties to be calculated based on the price of the first sale in a multi-tiered transaction (eg, a change of ownership from a Vietnamese factory, first to a middleman and then an on-sale to the importer) rather than the higher price paid by the final U.S. importer. The duty is imposed on the first sale, not on a subsequent sale to the actual importer. By avoiding the middleman’s markup, the importer can significantly reduce the total duties paid, sometimes by 10–25%.
For a Vietnamese exporter, this structure provides a competitive edge by lowering the “landed cost” of goods without the need to significantly cut its own factory-gate prices. It makes products more attractive to U.S. buyers compared to competitors who follow standard “last sale” valuation. To succeed, the manufacturer must ensure that the sequence of a transaction is well documented to establish that the goods were clearly destined for the U.S. at the time of the first sale.
Supply Chain Shifts
Another strategy has been to relocate final assembly or critical manufacturing stages to third countries to alter the “Country of Origin” for U.S. tariff purposes. If a product undergoes “substantial transformation” in another jurisdiction – meaning it emerges as a new and different article of commerce with a distinct name, character, or use – manufacturers can move beyond the high-tariffs that affect Vietnamese exports, even while continuing to utilize high-quality Vietnamese inputs and components.
Valuation Unbundling
Valuation unbundling is also a tariff mitigation strategy that involves identifying and stripping away non-dutiable costs that are often bundled into a product’s final invoice price. Charges such as buying commissions, inland freight, or related-party service fees can often be legally removed from the reported value of the goods, reducing the overall base upon which tariffs are calculated.
Conclusion
The “Trump tariff regime” is not a temporary disruption; it is seen as a permanent fixture of the 2026 global trade order. For Vietnamese businesses, being a good manufacturer is no longer enough to win in the U.S. market.
The path forward requires establishing dedicated internal trade teams to monitor valuation, classification, and sourcing. By coordinating closely with U.S. importers, Vietnamese exporters can better manage the openings provided in the regulations and are better equipped to compete more effectively.
For further information, please contact:
Nguyen Nhat Anh Thu, Russin & Vecchi
NNAThu@russinvecchi.com.vn
