Vietnam faces a 12.5% U.S. tariff under Section 301 after being named among 60 economies under forced labour compliance investigation on 23 July 2026. In response, the Ministry of Industry and Trade issued Circular No. 31/2026/TT-BCT on 11 June 2026, mandating traceability for high-risk exports via the VeriGoods platform. Sectors including textiles, electronics, semiconductors, and renewable energy equipment must now document origins of raw materials, components, and manufacturing steps. The U.S. measure applies to inputs linked to forced labour — not just finished goods — raising compliance pressure across multi-tier supply chains. Vietnam’s domestic risk classifications diverge from U.S. assessments, requiring exporters to map deeper-tier suppliers and strengthen due diligence beyond first-tier contractors.
According to opengovasia.com, Vietnam has intensified supply chain traceability requirements following a U.S. presidential memorandum issued on 23 July 2026 that places the country among 60 economies under Section 301 investigation by the Office of the United States Trade Representative (USTR) over forced labour compliance.
US Measures Trigger New Compliance Thresholds
The U.S. memorandum establishes a tiered tariff structure: economies that have introduced or committed to measures restricting goods produced with forced labour face a 10% tariff, while those assessed as lacking effective controls — including Vietnam, except for products listed in the memorandum’s annexes — are subject to a 12.5% Section 301 tariff. This applies not only to finished goods but also to products made wholly or partly using inputs associated with forced labour — a definition that significantly expands exposure for manufacturers relying on multi-tiered global supply chains.
The scope covers sectors critical to Vietnam’s export economy: textiles and garments, footwear, electronics, renewable energy equipment, semiconductors, minerals, and agricultural products. For textile exporters, compliance now requires documented provenance for cotton, fibres, yarn, fabric, dyes, and final assembly — extending accountability far beyond factory gates.
New Vietnamese Regulations Mandate Digital Traceability
In response, Vietnam’s Ministry of Industry and Trade issued Circular No. 31/2026/TT-BCT on 11 June 2026, mandating traceability management for high-risk products under its authority. The regulation requires businesses either to submit data directly to the national VeriGoods platform or maintain internal systems capable of secure, real-time integration with VeriGoods. The ministry stated that VeriGoods will support data storage, verification, and traceability code generation across supply chains — aligning with Vietnam’s broader digital transformation agenda in trade management and regulatory oversight.
While mandatory for high-risk categories, the circular encourages voluntary adoption across other sectors. According to the Ministry of Industry and Trade, the initiative is designed to standardise documentation, prevent transhipment and relabelling, and strengthen end-to-end visibility from raw material origins through manufacturing sites, transportation processes, and delivery documentation.
Supply Chain Mapping and Due Diligence Urged
Authorities are advising firms to immediately review and standardise traceability protocols — especially exporters, importers, and manufacturers. Officials noted a key complication: U.S.-designated high-risk products do not always match Vietnam’s domestic risk classifications. For example, certain textile inputs are classified domestically as medium risk, while some fuels are designated high risk — yet internationally scrutinised materials like cotton, semiconductor components, photovoltaic panels, and battery storage materials may trigger U.S. scrutiny regardless of local classification.
Businesses are therefore urged to map supply chains beyond first-tier suppliers, conduct rigorous supplier due diligence, and maintain batch- or lot-level records. As the Ministry of Industry and Trade emphasized, traceability must capture not just final assembly but upstream sourcing — including origin verification, transportation logistics, and packaging integrity — to meet both U.S. enforcement expectations and Vietnam’s new regulatory baseline.
Source: opengovasia.com
Compiled from international media by the SCI.AI editorial team.
