“Made in Vietnam” is now a claim companies must prove
13 Aug 20265 min read
Summary
- A product assembled in Vietnam from predominantly Chinese components can still be treated as Chinese at the border — exposing importers to tariffs, anti-circumvention investigations and retroactive duties, according to customs and trade lawyer Dr Chabaporn Wenzel.
- Origin turns on the Rules of Origin and the substantial-transformation test applied to each shipment; a certificate of origin alone no longer satisfies customs authorities.
- The tightening has turned origin integrity into a cargo-security discipline, according to Tony Lugg, chairperson of the Transported Asset Protection Association Asia Pacific — the auditable origin file spans procurement, factory-security and logistics data, with the customs department now only one contributing input into a file it no longer carries alone, and it belongs at supply-chain leadership level.
A car part, an electronics device or an appliance can be assembled in Vietnam and still count as Chinese when it reaches a US or EU border. Whether Vietnam is genuinely diversifying its manufacturing, or brands are relabelling Chinese-origin goods through an assembly step, is answered by the origin ruling customs applies to each shipment against Rules of Origin criteria.
Global brands have moved assembly into Vietnam at speed to escape tariffs on Chinese-origin goods. The country’s electronics sector still depends heavily on imported inputs — chips, displays and connectors arriving predominantly from China, according to VietnamPlus. A supply chain does not necessarily change origin when only its final assembly step relocates while the components and most of the value still come from China.
In an exclusive interview with Value Chain Asia, Dr Chabaporn Wenzel, chief executive and founder of Setlight Consulting and Everything-About.Trade, a Dubai-based customs and global-trade advisory firm, set out why the label decides nothing. “From a customs perspective, origin is not determined by the label on the product or the location of final assembly,” she said. “It is determined by whether the product satisfies the applicable Rules of Origin and whether sufficient economic transformation has genuinely taken place in Vietnam.”
Two separate origin regimes bear on a Vietnamese-assembled device, and they work differently. Preferential origin governs whether a good qualifies for reduced tariffs under a free trade agreement; under the ASEAN Trade in Goods Agreement a good generally needs a Regional Value Content of at least 40%. Non-preferential origin governs marking and anti-circumvention, and the United States applies a different test — substantial transformation. A product acquires a new origin only where it is transformed into an article with a new name, character or use. Assembly or relabelling of Chinese components does not clear that bar.
The distinction determines whether a US importer pays the 20% preferential rate or the 40% transshipment rate. Customs and Border Protection has repeatedly found that where Chinese subassemblies are merely screwed together or lightly wired and tested in Vietnam, no substantial transformation has occurred. The automotive sector offers the clearest examples: building an engine control unit by populating a circuit board, testing the unit and integrating calibration software can confer Vietnamese origin; assembling a wiring harness from imported Chinese conductors typically cannot. Where a company performs only limited assembly, testing or packaging, Wenzel said, “there is a significant risk that customs authorities may consider the activity insufficient to confer Vietnamese origin.”
The burden of proof now sits with the company claiming origin. “A certificate of origin alone is no longer sufficient,” Wenzel said. A company must hold a comprehensive origin dossier: detailed bills of materials, supplier declarations and component-origin evidence, costed Regional Value Content calculations, manufacturing process records, import and export documentation, and internal governance over how origin is determined. Customs authorities increasingly expect a company to demonstrate, years after importation, that a product genuinely met the requirements when it shipped.
The origin question no longer stays inside the customs department. “Origin determination is no longer a purely technical customs exercise — it has become a strategic business, compliance, and board-level risk management issue,” Wenzel said. A retroactive finding can reopen years of past shipments and carry reputational damage alongside the duty, especially for a brand that publicised its move out of China as proof of a resilient, diversified supply chain.
A second reading comes from cargo security. Tony Lugg, chairperson of TAPA Asia Pacific, told Value Chain Asia the tightening customs environment has become a cargo-security discipline in its own right. When reciprocal tariffs were introduced, some shippers attempted to create “a new identity for shipments, including changes to paperwork, labelling, repacking, and the use of plain packaging.” TAPA APAC now treats these as cargo-security red flags — unexplained routing, relabelling, split shipments, bonded-zone handling and weak supplier records.
Where Wenzel frames origin as a legal-doctrine problem, Lugg reframes it as cross-functional. “The common mistake is treating Vietnam origin as a labelling, routing, or certificate-management problem,” he said. “It is really an evidence problem. A Certificate of Origin helps authenticate origin, but it does not cure a supply chain that cannot prove substantial transformation or value addition.” Customs data, procurement records, factory-security data and logistics data sit in different corporate functions, and consolidating them into a single defensible origin file before the shipment moves is what closes the exposure. Reuters reported that Vietnam’s Ministry of Industry and Trade issued a 15 April 2025 directive strengthening inspection of US-bound goods, with focused scrutiny on categories including wooden furniture, steel parts, bicycles, batteries and wireless headphones.
For brands building Vietnamese capacity, the test points in one direction: genuine manufacturing depth. Operations that manufacture engine control units or perform equivalent complex processing hold a defensible claim; those that import complete Chinese subassemblies for final fit-up carry a documentation risk that intensifies as enforcement tightens through 2026 and 2027. The investment that satisfies a customs auditor is the same investment that builds real local capability — which is what diversification was meant to deliver. “The real question,” Wenzel said, “is whether the company can convincingly demonstrate that substantial transformation and genuine value creation occurred in Vietnam and withstand a rigorous customs audit.”
Global brands have moved assembly into Vietnam at speed to escape tariffs on Chinese-origin goods. The country’s electronics sector still depends heavily on imported inputs — chips, displays and connectors arriving predominantly from China, according to VietnamPlus. A supply chain does not necessarily change origin when only its final assembly step relocates while the components and most of the value still come from China.
In an exclusive interview with Value Chain Asia, Dr Chabaporn Wenzel, chief executive and founder of Setlight Consulting and Everything-About.Trade, a Dubai-based customs and global-trade advisory firm, set out why the label decides nothing. “From a customs perspective, origin is not determined by the label on the product or the location of final assembly,” she said. “It is determined by whether the product satisfies the applicable Rules of Origin and whether sufficient economic transformation has genuinely taken place in Vietnam.”
Two separate origin regimes bear on a Vietnamese-assembled device, and they work differently. Preferential origin governs whether a good qualifies for reduced tariffs under a free trade agreement; under the ASEAN Trade in Goods Agreement a good generally needs a Regional Value Content of at least 40%. Non-preferential origin governs marking and anti-circumvention, and the United States applies a different test — substantial transformation. A product acquires a new origin only where it is transformed into an article with a new name, character or use. Assembly or relabelling of Chinese components does not clear that bar.
The distinction determines whether a US importer pays the 20% preferential rate or the 40% transshipment rate. Customs and Border Protection has repeatedly found that where Chinese subassemblies are merely screwed together or lightly wired and tested in Vietnam, no substantial transformation has occurred. The automotive sector offers the clearest examples: building an engine control unit by populating a circuit board, testing the unit and integrating calibration software can confer Vietnamese origin; assembling a wiring harness from imported Chinese conductors typically cannot. Where a company performs only limited assembly, testing or packaging, Wenzel said, “there is a significant risk that customs authorities may consider the activity insufficient to confer Vietnamese origin.”
The burden of proof now sits with the company claiming origin. “A certificate of origin alone is no longer sufficient,” Wenzel said. A company must hold a comprehensive origin dossier: detailed bills of materials, supplier declarations and component-origin evidence, costed Regional Value Content calculations, manufacturing process records, import and export documentation, and internal governance over how origin is determined. Customs authorities increasingly expect a company to demonstrate, years after importation, that a product genuinely met the requirements when it shipped.
The origin question no longer stays inside the customs department. “Origin determination is no longer a purely technical customs exercise — it has become a strategic business, compliance, and board-level risk management issue,” Wenzel said. A retroactive finding can reopen years of past shipments and carry reputational damage alongside the duty, especially for a brand that publicised its move out of China as proof of a resilient, diversified supply chain.
A second reading comes from cargo security. Tony Lugg, chairperson of TAPA Asia Pacific, told Value Chain Asia the tightening customs environment has become a cargo-security discipline in its own right. When reciprocal tariffs were introduced, some shippers attempted to create “a new identity for shipments, including changes to paperwork, labelling, repacking, and the use of plain packaging.” TAPA APAC now treats these as cargo-security red flags — unexplained routing, relabelling, split shipments, bonded-zone handling and weak supplier records.
Where Wenzel frames origin as a legal-doctrine problem, Lugg reframes it as cross-functional. “The common mistake is treating Vietnam origin as a labelling, routing, or certificate-management problem,” he said. “It is really an evidence problem. A Certificate of Origin helps authenticate origin, but it does not cure a supply chain that cannot prove substantial transformation or value addition.” Customs data, procurement records, factory-security data and logistics data sit in different corporate functions, and consolidating them into a single defensible origin file before the shipment moves is what closes the exposure. Reuters reported that Vietnam’s Ministry of Industry and Trade issued a 15 April 2025 directive strengthening inspection of US-bound goods, with focused scrutiny on categories including wooden furniture, steel parts, bicycles, batteries and wireless headphones.
For brands building Vietnamese capacity, the test points in one direction: genuine manufacturing depth. Operations that manufacture engine control units or perform equivalent complex processing hold a defensible claim; those that import complete Chinese subassemblies for final fit-up carry a documentation risk that intensifies as enforcement tightens through 2026 and 2027. The investment that satisfies a customs auditor is the same investment that builds real local capability — which is what diversification was meant to deliver. “The real question,” Wenzel said, “is whether the company can convincingly demonstrate that substantial transformation and genuine value creation occurred in Vietnam and withstand a rigorous customs audit.”