US Presses Vietnam on Trade and Security with Three Investigations

Vietnam is currently navigating a complex trade negotiation with the United States, facing simultaneous investigations from Washington across three critical fronts: intellectual property rights, forced labor, and industrial overcapacity. According to reports, Vietnamese officials are in Washington for a new round of talks, which are complicated by these ongoing US inquiries. The US delegation, often led by Trade Representative Jamieson Greer, is focused on demands for Hanoi to lower non-tariff barriers, bolster intellectual property protection, and collaborate on economic security and export controls. Key disagreements also revolve around rules of origin and preventing the transshipment of Chinese goods through Vietnam. US officials have repeatedly cited the growing trade deficit with Vietnam as a reason for exerting pressure. Data from the US Bureau of Economic Analysis (BEA) indicated that the US goods trade deficit with Vietnam reached approximately $178 billion in 2025. In a meeting in March 2025, Greer emphasized Vietnam's need for "stronger solutions to open its market and improve the bilateral trade balance." Greer has publicly referred to the overall US global trade deficit of $1.2 trillion as "unsustainable and unacceptable," with a key objective under the Trump administration being to reduce this deficit. He has also highlighted instances of "outright illegal shipping" where goods are sent to Vietnam and relabeled as "Made in Vietnam." US authorities have frequently accused Vietnam of being used as a transit point for Chinese products destined for the US market. In 2025, Washington threatened to impose tariffs of up to 40% on goods that were illegally transshipped through Vietnam. In response, the Vietnamese Ministry of Industry and Trade stated in early July 2025 that it would issue a new decree to "further stipulate penalties for origin fraud." However, the progress made in combating Chinese transshipment through Vietnam remains unclear. On the issue of intellectual property violations, the Office of the US Trade Representative (USTR) placed Vietnam on its "priority foreign country" list in April 2026, the most severe designation under Section 182 of the US Trade Act. This was the first time in 13 years a country had received this designation. Vietnam has attempted to address these concerns by closing down infringing websites and increasing efforts against counterfeit goods and the use of pirated software during a campaign from May to July. The three investigations by the US add significant pressure to the ongoing trade talks. The latest is concerning intellectual property rights, officially announced on May 29, 2026, under Section 301 of the Trade Act of 1974. The second investigation, initiated on March 12, 2026, pertains to forced labor. The third, launched on March 11, 2026, examines concerns about industrial overcapacity, investigating whether Vietnam creates or maintains such conditions in certain industries, thereby distorting trade and harming US businesses. To date, only the forced labor investigation has yielded a preliminary finding. A report released on June 2, 2026, stated that Vietnam had not effectively issued or enforced a ban on importing goods produced by forced labor. The USTR proposed an additional 12.5% tariff and opened a public comment period before a final decision. In response, Vietnamese Foreign Ministry spokesperson Pham Thu Hang stated two days later that the US findings "do not accurately reflect the reality and Vietnam's efforts to prevent and minimize forced labor," and affirmed the country's adherence to international labor standards. Source: BBC Vietnamese