Trade Enforcement in the Spotlight: What Vietnamese and Chinese companies - and multinationals with Asia-based supply chains - need to know if doing business with the U.S.

Overview: Trade enforcement increasing – Asia-focused supply chains in view

On August 29, 2025, the U.S. Department of Justice (DOJ) announced the creation of a multi-agency Trade Fraud Task Force, intended to “bring robust enforcement against importers and other parties who seek to defraud the United States.” For more information, please see our Alert. The Task Force builds on a series of Administration actions prioritizing trade enforcement and signals a significant escalation in the U.S.’s focus on tariff evasion, customs fraud, and related misconduct. For example, in a May 12 memorandum, the DOJ Criminal Division identified “trade and customs fraud, including tariff evasion” as a “high-impact area” for enforcement. At the same time, the DOJ revised its Corporate Whistleblowers Awards Pilot Program to include “trade, tariff, and customs fraud” as an approved subject matter for whistleblowing submissions. Just weeks later, on July 10, the DOJ announced the formation of a new Market, Government, and Consumer Fraud Unit specifically aimed at combating trade fraud and tariff evasion.

These developments signal increasingly serious consequences—including criminal prosecutions— for importers to the U.S. who fail to comply with their evolving obligations under U.S. trade laws, of which they may be unaware. Civil enforcement efforts also continue to intensify, as highlighted by recent data and legal proceedings, particularly under statutes like: (1) the Uyghur Forced Labor Prevention Act (UFLPA), targeting goods from the Xinjiang Autonomous Region of the People’s Republic of China; (2) the Enforce and Protect Act (EAPA), creating procedures for U.S. competitors to report importers for alleged illegal transshipment and tariff evasion; (3) the False Claims Act (FCA), a 19th century law originally targeting government procurement fraud, which is now increasingly being applied to customs declarations for imports; and (4) U.S. Customs and Border Protection’s (CBP’s) authority to issue significant penalties for customs fraud and misclassification under the U.S. penalty statute, 19 U.S.C. § 1592.

• UFLPA enforcement remains active. Between October 2024 and August 2025, CBP reviewed over 11,500 shipments, denying entry to over 7,700. Shipments from China and Vietnam made up nearly 80% of the total for which entry was denied, with high-impact industries including automotive parts, aerospace components, and consumer products. The UFLPA Entity List also expanded to 144 entities as of January 2025. Additions included suppliers of textiles, solar energy products, and industrial inputs.
• EAPA investigations continue across sectors. More than 400 cases have been initiated to date, with recent examples involving steel piping, chemical additives, and solar modules. CBP now frequently applies interim measures like entry suspension and “live entry” requirements to pay duties before imported goods are released into the U.S. market, which were less common in previous years.
• FCA exposure has broadened. CBP and the DOJ have emphasized that inaccurate country-of-origin (COO) declarations, tariff classifications, and undervaluation practices may trigger FCA liability when made knowingly or recklessly, in practice meaning that failure by an importer to verify its supply chain could result in liability.
• CBP indicates that it will engage in robust enforcement through its penalty authority. Specifically, CBP has repeatedly made it clear that it considers tariff avoidance by declaring incorrect information on customs forms to be a form of trade evasion, and that the agency will pursue violations to the fullest extent possible.

The Executive Branch’s increasing prioritization of trade issues, and corresponding allocation of resources, contribute to this ramp-up in enforcement. Companies with upstream operations in China or production based in Vietnam should be prepared for new audit requests, increased documentation collection burdens, and the reputational risks associated with regulatory detentions in connection with their sales to the U.S.

China: Heightened enforcement – from source to supply chain

For Chinese manufacturers and upstream suppliers, U.S. trade enforcement now targets not only exporters, but the entire supply chain, including indirect contributors to finished goods.

• UFLPA enforcement remains centered on Chinese-origin goods. In January 2025, 37 PRC-based companies were added to the UFLPA Entity List, “marking the largest single expansion of the list to date.” CBP detains goods manufactured outside China (e.g., in Vietnam or Malaysia) if they contain inputs from UFLPA-listed entities, expanding enforcement beyond direct PRC exports.
• EAPA investigations now reach “upstream actors,” not just U.S. importers. Recent investigations – such as Case 8112 on woven ribbons transshipped through India from China, and Case 1864 on seamless carbon and alloy steel standard, line, and pressure pipe and certain oil country tubular goods transshipped through Thailand from China – have sought documentation from China-based manufacturers and raw material suppliers.
• CBP closely scrutinizes claims of non-China origin, particularly when production outside of China involves only modest reprocessing.

Practical risks:

• “Substantial transformation” remains a strict standard. Repackaging or limited assembly outside China is generally insufficient to confer new origin status.
• Forced labor rebuttals require credible documentation, including sourcing records, labor conditions, and supply chain tracing—often reaching Tier 2 or 3 suppliers, and in some cases, reaching all the way to raw material sources.
• Whistleblower activity is increasing, especially involving allegations of false COO markings and undervaluation. The FCA allows for treble damages and whistleblower recovery of up to 30% of proceeds.

Key steps for businesses selling from abroad to the U.S.:

• Conduct risk-mapping, screening, and due diligence to identify potential Xinjiang-linked inputs, including PVC, cotton, quartz, and aluminum.
• Implement robust supply chain traceability, including English-language supporting documents, and incorporate contractual obligations requiring suppliers to provide traceability information upon request.
• Prepare for CBP or DOJ inquiries into origin declarations, even when goods are exported through third countries.
• Reassess pricing and invoicing practices for cross-border transactions that may intersect with U.S. import reporting.
• Coordinate compliance at the group-level across trade, legal, and operational teams to respond effectively to audits or detentions.

Vietnam in the enforcement crosshairs

Vietnam continues to attract investment as a key alternative manufacturing base. However, recent policy signals from the U.S. government indicate that Vietnam’s growing trade profile will come with closer scrutiny—especially as a potential intermediary for Chinese goods. In July 2025, the U.S. announced a bilateral trade deal with Vietnam including a 20% tariff for goods “produced in Vietnam” and a 40% tariff for goods “transshipped” from other countries, such as China. While “transshipment” remains undefined at this time, Vietnam’s Ministry of Industry and Trade issued a document on July 3 suggesting that increased inspections and additional penalties for origin fraud will be put in place. This includes Chinese-origin goods subject to U.S. trade remedies.

Trade concerns surrounding Vietnam’s role as an intermediary extend beyond transshipment. Vietnamese exports have also been impacted by increased UFLPA enforcement. From October 2023 through August 2025, Vietnam had the highest value of shipments subject to UFLPA reviews and enforcement, US$560 million, relative to other countries, including China itself. Denied shipments primarily consisted of industrial and manufacturing materials, followed by apparel, footwear, and textiles. For EAPA cases, origin claims may be challenged if value added in Vietnam is insufficient to meet substantial transformation tests – as seen in the 2021 decision that carbon steel butt-weld pipe fittings imported from Vietnam remained subject to antidumping duties because the goods were still considered Chinese-origin.

Next steps for Vietnam-based companies and regional operations:

• Conduct origin audits to assess whether processing in Vietnam is sufficient under U.S. standards.
• Review sourcing documentation for components from China, especially from high-risk regions or UFLPA-listed entities.
• Maintain traceable, English-language records showing labor, materials, and manufacturing stages in Vietnam.
• Update contracts with suppliers to include COO warranties, audit rights, and compliance representations.
• Monitor updates to the U.S.-Vietnam trade framework and how rules of origin will be enforced.