Impact Analysis on Foreign-Invested Companies in Vietnam
Research Report | Updated as of February 24, 2026
1. Overview & Background
On February 20, 2026, the U.S. Supreme Court ruled 6-3 in Learning Resources, Inc. v. Trump (No. 24-1287) that all mutual tariffs imposed under the IEEPA (International Emergency Economic Powers Act) are unlawful and void. This ruling invalidated the global 10% baseline tariff, country-specific reciprocal tariffs, and drug/immigration tariffs targeting China, Canada, and Mexico — all enacted since ‘Liberation Day’ in April 2025.
President Trump immediately invoked Section 122 of the Trade Act of 1974 to declare a 10% global additional tariff, and the following day (February 21) announced an increase to 15% via Truth Social. The tariff is currently in effect from February 24, 2026 (Tuesday) per official CBP notice under HTSUS codes 9903.02.82/83, with an expiration date of July 24, 2026 (150-day limit).
Furthermore, on the evening of February 24, 2026 (local time), President Trump is scheduled to address tariff policy directly in his State of the Union address — further updates will be required following that speech.
2. Key Points of the Supreme Court Ruling
2-1. Ruling Summary
| Item | Details |
|---|---|
| Case | Learning Resources, Inc. v. Trump, No. 24-1287 (Feb. 20, 2026) |
| Decision | 6-3 — All IEEPA mutual tariffs declared unlawful and void |
| Core Rationale | ① IEEPA’s ‘regulation of imports’ does not include tariff authority ② Article I taxation power belongs exclusively to Congress ③ Major Questions Doctrine applied |
| Unaffected Tariffs | Section 232 (steel, aluminum, autos, semiconductors etc.), Section 301 (China tariffs) — outside scope of ruling |
2-2. Trump Administration Response After Ruling
Immediately following the ruling, the administration issued three executive orders: ① termination of all IEEPA-based tariffs, ② activation of 10% global tariff under Section 122, and ③ continuation of de minimis exemption suspension. Following the 15% increase announcement, CBP began applying 15% under HTSUS 9903.02.82/83 from February 24, though some field-level confusion between 10% and 15% rates has been reported.
⚠️ Key Consideration: Section 232 tariffs on steel, aluminum, automobiles, and semiconductors remain in full effect and are unrelated to the IEEPA ruling. Companies operating in Vietnam whose products are subject to Section 232 will see no benefit from this ruling.
3. Latest Updates as of February 24, 2026
3-1. Actual Implementation Status of Section 122 Tariff
| Item | Details |
|---|---|
| Official Effective Date | Tuesday, February 24, 2026 at 00:01 EST |
| CBP Applied Rate | 15% (HTSUS 9903.02.82 and 9903.02.83) |
| Expiration Date | July 24, 2026 (150-day limit) |
| In-Transit Exception | Cargo already in transit before Feb 24 00:01 AND arriving at U.S. port before Feb 28 is exempt |
| Key Exemptions | Section 232 items (steel, aluminum, semiconductors etc.), USMCA-qualifying items, critical minerals, energy, pharmaceuticals, certain electronics |
| State of the Union (SotU) | Feb 24, 2026 9:00 PM EST — President to re-address tariff policy (content requires post-speech update) |
3-2. Legal Vulnerability of Section 122 — New Challenges Expected
⚠️ Alert: Section 122 Also Faces Legal Challenges
Multiple legal scholars and think tanks (PIIE, Cato, CFR, etc.) have noted that the ‘balance-of-payments deficit’ trigger for Section 122 may not apply to the U.S. situation. The $1.2 trillion trade deficit cited by the Trump administration is based on goods only; the current account deficit including services is considerably smaller. Following the Loper Bright decision (2024, overturning Chevron deference), courts are increasingly likely to apply independent scrutiny to presidential factual determinations.
3-3. IEEPA Tariff Refund Progress
The estimated refund pool is approximately $142 billion based on CBP data. U.S. importers must file protests directly with CBP, and the Trump administration has shown reluctance to issue proactive refunds. Companies with Vietnam-origin goods that paid IEEPA tariffs should begin preparing protest documentation.
3-4. Section 301 Investigations — The Key Long-Term Variable
USTR has announced Section 301 investigations targeting nearly all major trading partners. Investigations may cover Vietnam-origin goods produced by foreign companies — particularly electronics, apparel, footwear, and furniture. Unlike Section 122, Section 301 has no 150-day limit and can impose high, long-term tariffs on specific countries and products, making it the most significant post-July risk.
4. Vietnam Impact Assessment (as of Feb 24, 2026)
4-1. Tariff Rate Changes — Foreign Company Perspective
| Category | IEEPA Regime (Apr 2025–Feb 20, 2026) | Section 122 (from Feb 24, 2026) | Notes |
|---|---|---|---|
| Vietnam-origin Electronics & Consumer Goods | 20% (U.S.-Vietnam negotiation) | 15% (flat rate) | 5pp decrease — benefit |
| U.S.-origin Goods Re-exported via Vietnam | N/A (IEEPA exempted) | 15% if made in Vietnam | Potential new exposure |
| EU-origin Goods (e.g., footwear, apparel) | 20% (IEEPA rate) | 15% (flat rate) | 5pp decrease — benefit |
| Singapore/ASEAN Origin Goods | 20% (IEEPA rate) | 15% (flat rate) | 5pp decrease — benefit |
4-2. Vietnam’s Strategic Position
Vietnam remains a highly competitive manufacturing hub for non-Chinese supply chains. The 15% uniform Section 122 tariff is lower than the 20–46% IEEPA rates previously applied. For companies producing electronics, footwear, apparel, and furniture in Vietnam, the effective tariff burden is reduced compared to the IEEPA regime. However, the upcoming Section 301 investigation poses a structural risk to Vietnam’s export competitiveness.
ING Group Analysis: Vietnam’s new effective tariff rate under Section 122 (15%) compares favorably to key competitors — Bangladesh: ~15%, Cambodia: ~15%, Indonesia: ~15%. Vietnam’s logistics, infrastructure, and workforce advantages remain intact, but Section 301 outcome is the critical 12–18 month risk.
4-3. Vietnam Government Response
The Vietnamese government has proactively engaged with U.S. trade authorities to negotiate preferential treatment. Vietnam has offered concessions including increased purchases of U.S. LNG, agricultural products, and Boeing aircraft. The government is also developing domestic incentives to support export manufacturers affected by tariff volatility.
5. Implications for Other Foreign Companies Operating in Vietnam
5-1. U.S. Companies with Vietnam Operations
Major U.S. companies with significant Vietnam manufacturing bases include Intel (semiconductor testing/packaging), Nike (footwear — Vietnam accounts for ~50% of global production), and Gap/PVH (apparel). These companies face a nuanced situation: they are U.S.-headquartered but their Vietnam-manufactured goods face the same 15% Section 122 tariff when exported to the U.S.
| Company/Sector | IEEPA Regime Impact | Section 122 Impact |
|---|---|---|
| Intel (Chips/Packaging) | 20% on Vietnam-origin products | 15% — reduced burden, but Section 232 risk on semiconductors |
| Nike / Footwear | 20% on Vietnam-made shoes | 15% — moderate relief; Section 301 investigation risk |
| Apparel (Gap, PVH) | 20% on Vietnam-made garments | 15% — relief, but tariff competitiveness vs. Bangladesh/Cambodia narrows |
| Tech Assembly (Dell, HP) | 20% IEEPA rate | 15% — Section 301 is primary concern |
⚠️ Caution for U.S. Companies: Section 232 tariffs on semiconductors and related electronic components remain in force. Intel and other semiconductor-adjacent companies should not assume full relief from the IEEPA ruling.
5-2. European Companies with Vietnam Operations
Key European manufacturers in Vietnam include Adidas, H&M, and IKEA suppliers (footwear, apparel, and furniture). These companies primarily use Vietnam as an export platform to third markets including the U.S.
| Sector | IEEPA → Section 122 Change | Strategic Consideration |
|---|---|---|
| Footwear (Adidas, Puma Vietnam) | 20% → 15% on Vietnam exports to U.S. | 5pp reduction — material benefit given volume; Section 301 risk remains |
| Fast Fashion (H&M, Zara suppliers) | 20% → 15% | 15% is lower than some Bangladesh alternatives; competitiveness maintained short-term |
| Furniture (IKEA, Jysk suppliers) | 20% → 15% | Vietnam furniture exports to U.S. benefit; risk of Section 301 targeting wooden furniture (precedent exists) |
| Machinery/Industrials | Sector-specific IEEPA rates → 15% | Generally beneficial, but Section 232 may cover specific steel-intensive components |
EU-Vietnam Free Trade Agreement (EVFTA) context: EU companies benefit from EVFTA for EU-Vietnam bilateral trade, but EVFTA does not confer benefits on Vietnam-to-U.S. exports. The Section 122 tariff applies uniformly to all Vietnam-origin goods entering the U.S. regardless of investor nationality.
5-3. Singapore & ASEAN-Based Companies
Singapore-headquartered companies including Flex Ltd., Singtel subsidiaries, and various PE-backed manufacturers have significant Vietnam production footprints. Additionally, Thai, Malaysian, and Indonesian companies have moved manufacturing to Vietnam as part of China+1 diversification strategies.
| Origin/Sector | Previous IEEPA Rate | Section 122 Impact |
|---|---|---|
| Singapore (Electronics, EMS) | 20% IEEPA | 15% uniform — net positive; benefit from China+1 strategy intact |
| Thailand (Auto parts, HDD) | 20% IEEPA | 15% uniform — HDD and electronics sector benefits; Section 232 auto parts risk |
| Malaysia (Electronics, Gloves) | 20% IEEPA | 15% uniform — electronics benefit; gloves not subject to Section 232 |
| Indonesia (Textiles, Footwear) | 20% IEEPA | 15% uniform — textile/footwear competitiveness maintained vs. Vietnam |
⚠️ ASEAN Companies Alert: Companies that relocated from China to Vietnam specifically to avoid China-specific Section 301 tariffs (remaining at 25–145%) retain their core competitive advantage. The 15% Section 122 rate still represents a major improvement over sourcing from China.
5-4. Pros & Cons Summary for Other Country Companies
| Benefits | Risks & Challenges |
|---|---|
| IEEPA tariffs (20%+) eliminated — 5pp immediate relief under Section 122 (15%) | Section 301 investigations may reimpose high tariffs on Vietnam-origin goods in 12–18 months |
| IEEPA refund eligibility — U.S. importers can protest and recover overpaid tariffs | Section 122 has its own legal challenges — could be struck down, creating further uncertainty |
| Vietnam’s competitive position strengthened vs. China (Section 301 at 25–145% still applies to China) | De minimis exemption suspension continues — affects e-commerce/low-value shipment models |
| Section 122 uniform rate simpler to plan around than country-specific IEEPA rates | State of the Union speech (Feb 24) may introduce new policy directions |
6. Monitoring Schedule & Key Milestones
| Date/Period | Event | Action Required |
|---|---|---|
| Feb 24, 2026 (Tonight) | Trump State of the Union Address — tariff policy statement expected | Monitor announcements; update analysis immediately |
| Feb 25–28, 2026 | CBP clarification on 10% vs 15% rate application; in-transit goods clearance | Verify applied rates on all Vietnam-origin shipments |
| March 2026 | USTR Section 301 investigation scope announcement for Vietnam | Assess product/sector-level exposure; prepare submissions |
| March–April 2026 | Lower court filings challenging Section 122 constitutionality | Track litigation; prepare contingency plans |
| Q2 2026 | IEEPA tariff refund protest deadline (CBP) | File CBP protests for all IEEPA tariff payments; estimated ~$142B pool |
| July 24, 2026 | Section 122 expiration (150-day limit) | Prepare for post-expiry scenario; monitor Congressional tariff legislation |
| H2 2026 | Section 301 investigation outcomes; potential new tariff orders | Develop full supply chain contingency; evaluate Vietnam vs. alternative sites |
7. Conclusion & Recommendations
The Supreme Court’s IEEPA ruling provides immediate short-term relief for all foreign-invested companies operating in Vietnam — the applicable tariff rate has decreased from 20% to 15%, and the complex country-specific tariff structure has been simplified to a uniform rate. For U.S., EU, and Singapore/ASEAN companies with Vietnam manufacturing bases, this represents a tangible improvement in export economics to the U.S. market.
However, the structural risks have not been eliminated. Section 122 faces constitutional challenges similar to those that felled IEEPA. More critically, the USTR’s Section 301 investigations targeting Vietnam-origin goods represent a 12–18 month horizon risk that could potentially impose higher and longer-lasting tariffs than IEEPA ever did. Companies should not treat the IEEPA ruling as a signal to stand down from supply chain contingency planning.
Core Strategic Recommendation
Use the next 3–6 months of relative clarity under Section 122 to:
- File IEEPA tariff refund protests
- Engage USTR in Section 301 comment processes
- Stress-test supply chain scenarios assuming 25–30% Vietnam tariff in H2 2026
- Evaluate accelerated diversification to other ASEAN or nearshore markets as risk mitigation
Companies should monitor the State of the Union address closely and update supply chain and pricing models within 48–72 hours based on new policy signals. Customs Uni will issue updated alerts as new information becomes available.
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