Following the Supreme Court’s February 20, 2026 decision invalidating tariff authority under IEEPA, the Trump Administration rescinded the IEEPA tariffs and moved swiftly to reconstruct them through alternative means, including a 10% global tariff under Section 122 and the launch of two sweeping Section 301 investigations on March 11 and 12. The investigations target over 60 economies, including Vietnam, with written comments due April 15, 2026, and public hearings beginning April 28 on Forced Labor and May 5 on Overcapacity, amid indications that additional Section 301 investigations may follow. Section 301 provides USTR with significant flexibility in responding to such findings. While remedies may include tariffs, import restrictions, suspension of trade concessions, or negotiated agreements, in practice, tariffs are the most commonly used tool.
The first investigation, initiated on March 11, 2026, focuses on Structural Excess Capacity and Production in Manufacturing Sectors. Vietnam is named among 16 targeted economies, alongside major Asian manufacturing hubs such as China, Japan, Korea, India, and several ASEAN countries. The investigation reflects longstanding U.S. concerns that certain economies maintain production capacity far exceeding global demand, often supported by state policies, resulting in persistent overcapacity that burdens U.S. commerce. In Vietnam’s case, USTR specifically cites large and persistent trade surpluses as evidence of structural imbalance. According to USTR, in 2025, Vietnam recorded a global goods trade surplus of approximately $196 billion and a bilateral goods trade surplus with the United States of $178 billion, figures that USTR notes have expanded dramatically over the past six years. Key export sectors include electronics, machinery, apparel, and furniture, with Vietnam also serving as a final assembly hub within global supply chains. USTR further highlights evidence of excess capacity in industries such as cement and references prior findings from a 2021 Section 301 investigation concerning Vietnam’s foreign exchange market interventions and undervaluation of its currency.
The second investigation, initiated on March 12, 2026, targets Vietnam and 59 additional economies for Failure To Impose and Effectively Enforce a Prohibition on the Importation of Goods Produced With Forced Labor. USTR’s position is that the targeted countries’ domestic prohibitions on forced labor are insufficient absent robust and enforceable import bans. According to USTR, weak enforcement allows goods produced with forced labor to circulate in global markets, forcing U.S. exports to compete against lower-cost products, including goods that may have been denied entry into the U.S. market but re-exported elsewhere. The investigation therefore frames enforcement gaps not only as a human rights concern, but as a direct burden on U.S. commerce. Tariffs and import restrictions have been explicitly identified as potential remedies.
Vietnam’s inclusion in these investigations follows its prior experience under Section 301 during the first Trump Administration. In 2020, USTR initiated two Section 301 investigations targeting Vietnam—one relating to currency valuation and another concerning illegal timber imports. In both cases, nearly a year from the investigations began, USTR ultimately decided not to impose retaliatory tariffs despite making affirmative Section 301 findings, opting instead for negotiated resolutions. The currency investigation was resolved after an agreement between the U.S. Treasury and the State Bank of Vietnam, coupled with ongoing monitoring. The timber investigation concluded in October 2021 after Vietnam committed to strengthening its Timber Legality Assurance System and customs enforcement through a newly established Timber Working Group with USTR.
The current Section 301 investigations arise in a materially different context for Vietnam. Unlike the prior cases, Section 301 is now being deployed as a vehicle to reestablish an international import tariff regime on most of America’s trading partners, rather than merely to secure negotiated policy adjustments. For Vietnam and other targeted economies, the stakes are high: while past cases suggest the possibility of negotiated resolutions, the current political and legal context increases the likelihood of substantial tariffs, at levels at least similar to the prior 20 percent rates applied to US importers of goods made in Vietnam.
