Tesla and Samsung warn new Vietnam tariffs would hit US supply chains
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Tesla and Samsung have urged Washington not to impose new tariffs on Vietnamese goods, as the US government nears a Nov. 29 deadline to conclude its investigation into Vietnam’s intellectual property practices.
Submissions to the Office of the US Trade Representative (USTR), reported by Reuters, show a business community split over what should happen next. Companies that make products in Vietnam want to protect their supply chains. Groups representing US producers of steel, seafood, plywood, solar panels, and wood products want penalties.
USTR launched the probe in May under Section 301 of the Trade Act of 1974, after designating Vietnam a “priority foreign country.” Vietnam is the first jurisdiction in 13 years to be placed in that category, the most serious on the US intellectual property watchlist.
For many companies, Vietnam has been a leading option for moving production away from China. A fresh round of duties would test how well that strategy holds up when the alternative becomes a target itself.
Tesla and Samsung say Vietnam remains part of their US supply chains
In comments sent to USTR on July 2, Tesla urged the agency to “take into account the supply chain needs of American manufacturers.”
The electric vehicle maker said some advanced components and precision manufacturing equipment cannot be sourced from US suppliers, even after major investment in domestic production.
Reshoring debates often focus on where final assembly happens, but a US plant still depends on tooling, machinery, and parts that may only be made at scale elsewhere. A tariff on those inputs raises the cost of building in America, not only the cost of importing finished goods.
Samsung’s US unit made a similar case. Vietnam produces a significant share of the smartphones and network equipment Samsung sells in the US market. The South Korean company is also Vietnam’s largest foreign investor, with about $25 billion invested in the country.
Retail groups and trade associations representing footwear, apparel, and consumer goods makers, including producers of bicycles and video game consoles, also opposed further tariffs.
It is not yet clear whether any tariffs linked to the IP probe would apply across the board or target specific sectors.
Domestic producers see the probe as a chance for protection
On the other side, groups representing US producers of steel, seafood, plywood, solar panels, and wood products accused Vietnam of unfair practices and called for new tariffs.
Copyright holders pressed a different point. Software, film, and music industry groups urged Washington to secure concrete commitments from Vietnam on piracy. The Business Software Alliance, whose members include Microsoft, Oracle, and IBM, cited a 2017 survey that found about three-quarters of software installed on personal computers in Vietnam was unlicensed. The Motion Picture Association said piracy websites hosted in Vietnam attracted more than 12.5 billion visits worldwide last year.
The split reflects 2 different views of what trade policy should do. Import-reliant manufacturers and retailers see Vietnam as part of their cost base. Domestic producers see it as a competitor whose growth has come at their expense.
Vietnam’s trade figures sharpen that tension. Its exports to the US rose 42% in the first 8 months of 2026 compared with the same period in 2025. That made Vietnam the US trading partner with the largest goods surplus, ahead of China and Mexico. At the end of 2025, it ranked fourth.
Vietnam’s role in China plus one strategies is under pressure
Vietnamese goods already face a general 12.5% US tariff, imposed in July after an investigation into alleged failures to stop imports of goods made with forced labor. A separate US probe into alleged excess manufacturing capacity in Vietnam is also underway.
Vietnam previously faced 20% tariffs announced on President Trump’s “Liberation Day,” which the Supreme Court later struck down. According to Reuters, many economists believe the administration aims to restore at least that level.
Hanoi has urged Washington to conduct its investigations objectively.
For supply chain leaders, the bigger question concerns the China plus one model itself. Moving production to Vietnam reduced exposure to tariffs on Chinese goods, but it also concentrated risk in a single alternative. Vietnam has long been accused of serving as a transit hub for Chinese goods, and that charge has kept it under scrutiny in Washington.
If new tariffs follow, companies could face a choice between absorbing higher costs, shifting production again, or speeding up US investment that, by Tesla’s own account, cannot yet replace every imported input.
The Nov. 29 deadline will show whether USTR opts for broad duties, targeted measures, or the kind of enforcement commitments copyright groups have asked for. Whether any action lands on the components and equipment that US manufacturers say they still cannot source at home remains an open question.
Source:
Reuters
