US Customs Inspects China-Linked Factories in Vietnam

Spot Inspections Target Value-Add and Software Compliance in Vietnam

U.S. customs officials have initiated spot inspections at manufacturing facilities in Vietnam with links to Chinese companies, according to reporting that emerged on Monday. Inspectors focused their oversight on facilities exporting goods to the United States, reviewing company records, raw material origins, and the specific stages of production.

The primary goal of these reviews is to determine how much value was added locally before products are shipped across the Pacific, a critical factor for establishing country-of-origin determinations under American trade regulations.

Despite the heightened scrutiny, officials familiar with the matter noted that investigators have not yet uncovered significant evidence of Chinese-made goods illicitly transiting through the Southeast Asian nation to evade U.S. tariffs. U.S. Customs and Border Protection did not immediately respond to requests for comment.

The Stalled Trade Framework and Transshipment Disputes

The spot inspections coincide with a difficult round of negotiations between Washington and Hanoi as both sides struggle to finalize a comprehensive trade framework agreement initially reached in October. Talks have grown increasingly tense over non-tariff barriers and the mechanics of transshipment control.

U.S. President Donald Trump’s administration has consistently treated large bilateral trade deficits as proof of unfair trading practices. For Vietnam, the issue gained urgency as its trade surplus with the United States surged, with May data showing Vietnam overtaking Taiwan to record the largest monthly deficit.

U.S. Trade Representative Jamieson Greer emphasized the hardline stance taken by American negotiators regarding illicit shipping practices earlier this month.

Greer maintains that any final tariff deal must reach far beyond simply narrowing the bilateral trade deficit, which currently stands at $178 billion.

Hanoi Pushes Back Against Forced Labor Penalties and IP Claims

Vietnam finds itself navigating multiple regulatory fronts simultaneously. Beyond the transshipment probes, the country was among 60 economies hit with new U.S. tariffs over alleged failures to prevent forced labor within supply chains. Vietnam’s foreign ministry pushed back against the measure, stating that the decision does not fully reflect reality or the nation’s ongoing regulatory efforts.

To combat intellectual property complaints after being designated a priority foreign country by Washington in April, Vietnamese authorities submitted a massive 3,581-page document outlining enforcement actions. That submission detailed nearly 20,000 intellectual property infringement cases handled between 2021 and 2025. Domestically, President To Lam’s government has highlighted high-profile actions, including the seizure of 50,000 pairs of counterfeit Nike shoes, to demonstrate its commitment to stricter trade compliance.

Vietnam also remains the only nation facing three Section 301 actions by the United States, covering excess manufacturing capacity alongside intellectual property and transshipment concerns.

Supply Chain Shifts and the Stakes for Global Brands

The current trade friction highlights the vulnerabilities of modern supply chains. Over recent years, as tariff battles between Washington and Beijing intensified, multinational corporations rapidly diversified their manufacturing operations away from mainland China into Southeast Asia.

Vietnam evolved into an indispensable hub for major American consumer brands. Nike Inc. manufactures over half of its shoes in the country, while Apple Inc. has shifted substantial non-iPhone manufacturing—including AirPods and laptops—into Vietnamese facilities.

Moving from a loose preliminary framework to a binding bilateral agreement remains a formidable challenge due to the immense economic exposure involved.

Schwartz noted that while resolving the transshipment issue proves exceptionally difficult, diplomatic pressure will only escalate as findings from ongoing customs investigations materialize into implemented tariffs.