Since 2018, Section 301 duties have pushed manufacturers from China to Vietnam, Thailand, Mexico and India. Many relocations fail at US customs for one reason: the goods still count as Chinese.
301 duties follow HTS line + origin
The USTR lists identify 8-digit HTS subheadings; if your product's line is listed and its country of origin is China, the additional duty applies regardless of where it was shipped from. Two levers matter: the correct HTS line and the correct origin.
Substantial transformation is the US origin test
For 301 purposes, CBP applies the substantial transformation standard: the processing in the third country must create a new and different article of commerce — a change in name, character or use. Simple assembly, kitting, repacking or minor finishing in Vietnam does NOT confer Vietnamese origin. CBP rulings on multi-country production (many published since 2019) show exactly which operations pass.
Classification interacts with origin
Because 301 lists are written at the 8-digit level, reclassifying a product into a non-listed line is sometimes legitimate — when the GIR analysis genuinely supports it. Artificial "tariff engineering" that misdescribes the goods is fraud. The safe path: document the true technical characteristics, classify honestly, then optimize origin through real manufacturing steps.
Enforcement is real
The EAPA framework and DOJ prosecutions target transshipment schemes; Vietnamese authorities likewise revoke C/Os and penalize falsified origin dossiers. Exporters should keep production records proving where each transformation step happens — bills of materials by HS code, process flows, machine lists.
What we recommend to clients
Map every input material with its HS code, define where substantial transformation occurs, and align the US HTS line, the Vietnamese export code and the C/O evidence into one consistent story before the first container leaves.