For many buyers, the most expensive mistake in Vietnam sourcing is treating tariffs as a static spreadsheet line instead of a moving regime built on proof. In July 2026, a 10% Section 122 baseline applies to imports from Vietnam on top of ordinary HTS duty, putting many finished goods in an effective 10 to 25% band, while apparel can land between 18 and 42% all-in. That arithmetic, however, is not the main compliance danger. The sharp edge is the transshipment enforcement framework: since July 2025, US Customs and Border Protection (CBP) has imposed an additional 40% transshipment penalty on shipments found to be routed through Vietnam to evade tariffs, and multiple sources describe that penalty as non-negotiable, with no mitigation, remission, or appeal.
The enforcement trigger is not a marketing claim. Under 19 C.F.R. § 134.1(b), CBP evaluates country of origin based on where a product was last substantially transformed into a “new and different article” with a new name, character, or use. Multiple sources stress that assembly or relabeling of Chinese components does not qualify, and that a carton stamped “Made in Vietnam” does not prove origin. The burden of proof sits with the importer of record, which is often the US buyer rather than the Vietnamese factory. If CBP challenges the claim, the importer must produce documentation that supports the origin determination or face the transshipment consequence, which is reissued under HTS 9903.02.01.
What CBP Is Looking for in a “Made in Vietnam” File
Recent field actions show how granular the test can get. In July 2026, CBP agents conducted unannounced inspections at Chinese-linked factories in Vietnam, examining production records, raw material sourcing, and value-added processing ratios to determine whether goods labeled “Made in Vietnam” were genuinely transformed there or merely relabeled. While people familiar with the matter said inspectors found no significant evidence of Chinese goods illicitly transiting through Vietnam, the compliance message was still clear. The standard being applied remains substantial transformation, and one report warns that a large share of Vietnam’s electronics manufacturers may struggle to meet that bar regardless of intent, noting that locally sourced inputs can account for just 5 to 20 percent of total product value depending on the segment.
That is where “the 40% trap” forms in practice. A US Trade Representative remark captured the simplest fraud scenario—shipping goods to Vietnam and adding a “Made-in-Vietnam sticker”—but several sources emphasize that the real risk extends beyond obvious sticker swaps. Goods assembled from Chinese-origin components in Vietnam are not automatically Vietnamese in origin, and attaching pre-made parts with screws, adhesives, or connectors is described as typically insufficient. The safer path is proving operations that change essential character and add substantial value in Vietnam, paired with documentation that is in place before the shipment sails. One legal commentary also notes CBP ramping enforcement and cites more than $400M in uncovered unpaid duties year-to-date tied to evasion actions, underscoring why paperwork quality matters.
Timing adds another layer of uncertainty. Section 122 has a 150-day life, with its authority expected to sunset around July 24, 2026. Trade reporting notes the US Trade Representative opened a Section 301 investigation into Vietnam’s intellectual-property practices on May 29, 2026, with public comments due July 6 and a hearing on July 7, aiming to finalize duties before the Section 122 authority lapses. Against that shifting backdrop, the transshipment penalty has persisted across legal transitions and is described as targeted at fraud rather than legitimate factories. The practical takeaway for Vietnam rules of origin transshipment compliance is simple: build an origin file that can survive an audit, because rate regimes may change, but the documentation test is already here.
What happens if CBP decides a shipment was transshipped through Vietnam?
What is the legal test for a “Made in Vietnam” origin claim in the US?
Why are electronics exporters in Vietnam getting extra scrutiny?
How do the Vietnam rules of origin and transshipment enforcement affect the importer of record?
