The United States designated Vietnam as a "Priority Foreign Country" (PFC) in its 2026 Special 301 Report, prompting the Vietnamese government to quickly formulate a response. This marks the first time in 13 years that such a severe designation has been issued, raising concerns that it could lead to unfavorable trade measures, including tariffs.
According to Vietnamese media outlet VOV, the U.S. Trade Representative (USTR) classified Vietnam as a PFC in its report released on April 30. This is the highest level of warning issued to a specific trading partner since Ukraine in 2013.
The USTR cited five reasons for Vietnam's designation as a PFC: ineffective enforcement against copyright infringement in the digital environment, insufficient action against counterfeit goods and trademark violations, limitations in border enforcement mechanisms, a lack of substantial measures against unauthorized software use within companies, and weak criminal regulations against the unauthorized interception of encrypted cable and satellite signals.
In response, the Vietnam Chamber of Commerce and Industry (VCCI) stated that this issue requires careful examination. The department noted that if a formal investigation is initiated based on U.S. consultations and evaluations, the process could be lengthy and may lead to unfavorable trade measures, including tariffs.
During the first term of President Donald Trump, the U.S. initiated a Special 301 investigation against China in 2017 concerning intellectual property rights and technology transfer, using it as a basis for imposing additional tariffs. Many of those measures have remained in place since then. The Special 301 provision allows the U.S. to take retaliatory actions if it determines that a trading partner is infringing on intellectual property rights.
However, the WTO department noted that Vietnam has made consistent efforts in recent years to strengthen intellectual property protection through legal and institutional reforms and to enhance enforcement capabilities. Examples include amendments to intellectual property laws, improved inter-agency cooperation in handling violations, and inspections of the digital environment and product distribution stages. The Vietnamese government has also officially requested that the U.S. objectively and comprehensively assess its protection and enforcement efforts.
In this context, the response of Vietnamese companies has become a critical task. The WTO department advised businesses to reassess their compliance with intellectual property laws throughout their production, sales, and export processes. Companies deeply integrated with the U.S. market, partners, or supply chains should urgently review their internal compliance systems.
They should first verify whether the software currently in use is legal, whether images, trademarks, packaging, designs, and promotional content are used legally, and whether the sources and usage rights of data, designs, technical documents, digital works, and marketing materials are clearly secured. It is also essential to maintain internal documents that can prove ownership or usage rights of related intellectual property assets.
For companies providing intermediary infrastructure, such as digital platforms, e-commerce, data centers, and social networks, stricter standards have been proposed. They should enhance procedures for managing content and sellers, improve systems for receiving and processing infringement reports, and promptly remove products, stores, or content with clear violations. In high-risk areas, such as websites dealing with medical supplies, food, health supplements, and large-scale copyrighted content, early prevention and close cooperation with authorities are even more critical.
Exporting companies to the U.S. are advised to ensure compliance checks on intellectual property, as well as enhance information transparency across their supply chains, digitization of materials, and traceability. The WTO department explained that this is not only a risk management measure in anticipation of potential unfavorable actions from the U.S., but also a key condition for meeting international market compliance, origin, quality, and transparency standards.
Should the USTR officially initiate an investigation, related companies and industry associations are advised to actively provide information and opinions through appropriate channels. Demonstrating how they have refined their compliance management and the changes in Vietnam's legal reforms and enforcement efforts could be crucial in the U.S. evaluation process.
The WTO department analyzed that the 2026 Special 301 Report signals that intellectual property should be recognized as a core element of modern governance and long-term competitiveness, beyond mere legal issues. Ultimately, investments in compliance, risk control, supply chain digitization, standardization of internal processes, and market diversification will provide a solid foundation for responding to the changing international trade environment.
* This article has been translated by AI.
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