US Section 301 Probe Raises New Tariff Risks for Vietnam Exporters

The United States has imposed a 12.5 percent Section 301 tariff on imports from Vietnam following an investigation into forced labor import prohibitions. While selected products are exempt, the new measures introduce additional trade compliance considerations for Vietnamese exporters and manufacturers serving the US market.

12.5 percent tariff.

The tariff took effect as the temporary 10 percent global tariff expired, marking a shift toward country-specific trade restrictions after the US Supreme Court’s February ruling invalidated the President’s earlier “reciprocal” tariff regime. The measures stem from a Section 301 investigation launched in March 2026, which concluded that Vietnam had not sufficiently enacted or enforced restrictions on imports linked to forced labor. Later, on 2 June 2026, the Office of the United States Trade Representative (USTR) released the findings of 60 separate Section 301 investigations launched in March 2026.

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The investigations examined whether major US trading partners have adopted and effectively enforced measures preventing the importation of goods produced with forced labor. According to USTR, the failure of trading partners to restrict forced labor-related imports creates an “unlevel playing field” for US workers and businesses by allowing products made with artificially lower labor costs to enter global supply chains. Vietnam was included alongside economies such as China, India, Japan, South Korea, Thailand, Malaysia, the European Union, Canada, Mexico, and the United Kingdom.

The determination does not accuse Vietnam of systematically using forced labor. Rather, it assesses Vietnam’s regulatory approach to preventing the importation of goods produced with forced labor from third countries.

Exemptions and Product Specifics

Under the USTR determination, imports from Vietnam will be subject to a 12.5 percent Section 301 tariff, except for products specifically excluded under Annex I and Annex II, Part A of the notice. The Section 301 tariffs do not apply universally. The USTR has exempted selected products where tariffs could disrupt US supply chains or domestic production, cause broader economic disruption, apply to products that cannot be sourced in sufficient quantities from the United States or alternative suppliers, be ineffective in achieving the objectives of the investigation, or support trading partners’ commitments to strengthen forced labor import prohibitions.

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However, this exemption list is not static. Businesses exporting to the US should therefore reassess supply chain traceability, supplier due diligence, and trade compliance processes to mitigate potential tariff exposure. The excluded products are listed in Annex I and Annex II of the USTR notice and will be reflected in updates to the Harmonized Tariff Schedule of the United States (HTSUS).

Customs and Foreign Trade Zone Changes

The notice also changes the treatment of affected imports entering US Foreign Trade Zones (FTZs). Products subject to the additional Section 301 tariff must generally be admitted under “privileged foreign status,” limiting opportunities to mitigate tariffs through FTZ processing. For businesses using FTZs as part of their US distribution or manufacturing strategy, the provision limits opportunities to mitigate the additional tariff through customs procedures.

Additionally, the USTR clarified that each of the 60 Section 301 investigations is legally separate. Tariffs imposed on Vietnam apply independently of measures affecting other economies. Product exemptions granted to one economy do not automatically extend to another, and any successful legal challenge against the tariff measures for one country would not automatically invalidate the tariffs or exemptions applicable to Vietnam.

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Textile and Apparel Trade Measures

Alongside the Section 301 tariff rate proposal, the USTR previously also proposed a special mechanism for textile and apparel imports. Under this proposal, a designated volume of textile and apparel products could qualify for a reduced Section 301 tariff rate based on the importing country’s purchases of US-origin textile inputs, including cotton and man-made fibers. However, the Presidential Memorandum directs the USTR to establish a three-year tariff-rate quota (TRQ) programme for textile and apparel imports from Bangladesh, Cambodia, Indonesia, and Malaysia once implementation is determined to be feasible. Vietnam is not included in this mechanism.

Under the TRQs, a specified volume of textile and apparel exports from these four economies will be eligible to enter the United States free of the new Section 301 tariffs, provided they meet sourcing thresholds for US-origin textile goods or cotton. The mechanism is intended to encourage greater use of US-made inputs while reducing reliance on supply chains considered more likely to involve forced labor. Until the TRQs are established and take effect, the relevant textile and apparel imports from Bangladesh, Cambodia, Indonesia, and Malaysia will remain subject to the applicable Section 301 tariffs.