Business is split over the next US tariff decision, and the split runs through the technology supply chain. Tesla and Samsung are among the companies that have urged the US Trade Representative not to impose new tariffs on Vietnamese goods, according to submissions to the US government reported by Reuters, while US steel, solar and wood industry groups have called for penalties. The administration has set a November 29 deadline to conclude a trade probe launched in May into Vietnam’s alleged intellectual property violations.
The procedural posture is unusually severe. Washington has designated Vietnam a priority foreign country, the first jurisdiction in 13 years placed in the most serious US watchlist category, accusing it of a persistent failure to resolve long standing concerns about IP protection and enforcement. A separate probe into alleged excessive capacity is also underway. Vietnam has urged Washington to conduct the investigations objectively. It is not yet clear whether any tariffs tied to the IP case would be broad based or aimed at specific sectors.
The current baseline is already a tariff. The US levies a general 12.5 percent tariff on Vietnamese goods, imposed in July after an investigation into alleged failures to prevent imports of goods made with forced labour. Vietnam previously faced 20 percent tariffs after the Liberation Day announcements, which were struck down by the Supreme Court.
Tesla’s submission, filed on July 2, asked the Trade Representative to take into account the supply chain needs of American manufacturers, saying some advanced components and precision manufacturing equipment cannot be sourced domestically despite major investments in US production. Samsung’s US unit made the parallel case from the other direction: Vietnam produces a significant share of the company’s smartphones and network equipment for the US market, and Samsung is Vietnam’s largest foreign investor, with about 25 billion dollars invested in the country. Retail groups and trade associations for footwear, apparel and consumer goods made in Vietnam also opposed additional duties.
For technology, the November 29 deadline is the dated risk. A broad based tariff would tax the US bound output of Samsung’s Vietnamese plants at the moment its phone and network equipment margins are already absorbing record memory costs, and would raise component costs for US manufacturers who told the government the parts have no domestic source.