America-First Trade Policy Confronts Vietnam's IP Theft Epidemic
The Trump administration launched its first Priority Foreign Country designation in 13 years, opening a Section 301 probe into Vietnam's systemic intellectual property violations and counterfeiting that costs American businesses billions.
Police arrive once a year with a television crew, film the seizure of one shop, then everything returns to normal. That is how a vendor at Hanoi's Ninh Hiep wholesale market described enforcement while standing behind a stall loaded with counterfeit Ralph Lauren polos.
On May 29, the United States opened a sweeping Section 301 investigation into Vietnam's intellectual property violations, designating the nation a Priority Foreign Country for the first time in 13 years. The Trump administration's probe targets rampant online piracy, widespread counterfeiting, and a pattern of systemic exploitation that has cost American businesses billions.
The investigation marks a decisive departure from diplomatic patience to aggressive enforcement. U.S. Trade Representative Jamieson Greer said Vietnam's IP infringement "continues to impair the competitive position of U.S. innovators and creators" despite years of documented violations.
Greer launched the probe after Vietnam became the sole Priority Foreign Country in the 2026 Special 301 Report, issued April 30. The designation rests on five grounds: Vietnam's failure to combat online piracy, where it leads the Asia-Pacific region, pervasive counterfeiting, weak border enforcement, unlicensed software use, and cable and satellite signal theft.
The USTR previously attempted to work with Vietnam through IP Work Plans in 2020 and 2023. Vietnam "minimally engaged" and failed to make meaningful progress, according to the Federal Register notice. The 13-year gap between Priority Foreign Country designations reveals a pattern of diplomatic inaction that the current administration is determined to correct.
IP violations compound Vietnam's staggering economic drain on the United States. The 2025 U.S. goods trade deficit with Vietnam reached $178.2 billion, a 44.3 percent increase over 2024. U.S. imports from Vietnam have nearly quadrupled since 2018, climbing from $49.14 billion to $193.84 billion last year.
Vietnam launched a nationwide enforcement campaign from May 7 to May 30 targeting IP infringement, but on-the-ground reporting exposed superficial compliance. At Hanoi's Ninh Hiep wholesale market on May 27, counterfeit merchandise remained widely available despite the official crackdown.
"Police come once a year with a TV crew," the seller told Reuters, gesturing toward the fake Ralph Lauren polos displayed at her stall. "They film the seizure of a shop, and then it's business as usual."
Streaming piracy sites including MyFlixerz, believed to operate from Vietnam, remained accessible throughout the enforcement period. The USTR noted that Vietnam's administrative enforcement actions in physical and online markets actually fell 50 percent in 2025 compared with 2024.
"We need to see Vietnam resolve these long-standing concerns, including on a range of IP enforcement issues, in a manner that is sustained and that deters future IP infringements," Greer stated.
This represents the third Section 301 probe against Vietnam this year, alongside investigations into excess manufacturing capacity and forced labor initiated in March. The convergence of these probes could trigger significant new tariffs to protect American markets, with all three expected to conclude around July 2026.
The IP investigation accepts public comments through July 2 and requires a determination by November 2026 under Section 304 of the Trade Act. Vietnam's foreign ministry dismissed the probe as "a procedure carried out under U.S. law" and called for an "objective and fair assessment."
Deputy U.S. Trade Representative Rick Switzer underscored the administration's commitment to protecting American economic interests. "American innovators, creators, and brand owners rely on robust IP protection and enforcement," Switzer stated. "USTR will continue to press our trading partners to resolve trade barriers with respect to IP in their markets through our negotiations for Agreements on Reciprocal Trade and other engagements."
The United States maintains a 20 percent reciprocal tariff rate on Vietnamese goods under the Framework for an Agreement on Reciprocal, Fair and Balanced Trade. Negotiations have stalled over transshipment issues and Vietnam's massive trade surplus. The country posted a $19 billion trade surplus with the U.S. in January alone, with exports increasing 53 percent.
The administration's assertive posture follows years of diplomatic weakness that allowed Vietnam's IP violations to flourish. Criminal penalties in Vietnam have included suspended sentences and low fines that lack deterrent effect, while customs officials rarely exercise existing authority against counterfeit goods.
Prime Minister Le Minh Hung met with Switzer in Hanoi earlier this month, committing to combat intellectual property violations. Market realities contradict official statements, with counterfeit goods still flowing freely through Vietnam's distribution networks.
"Using all the enforcement tools we have to address unfair trade practices is a top priority," Greer stated. "We have rigorously reviewed our trading partners' IP practices and expect to take action where needed to protect American innovators and creators globally."
The investigation represents a fundamental correction in U.S. trade policy, placing American economic sovereignty above foreign exploitation. With Vietnam posting the largest U.S. trade deficit in 2025, the administration's actions deliver a clear message to American creators and entrepreneurs: the era of ignoring foreign IP theft has definitively ended.