The United States has launched a formal trade investigation into Vietnam over its intellectual property protection and enforcement practices, a move that could potentially lead to tariffs or other trade penalties.

US trade representative Jamieson Greer announced the start of the probe under Section 301 of the Trade Act of 1974. The investigation will evaluate whether Vietnam’s long-standing shortcomings in safeguarding intellectual property are unreasonable or discriminatory, and whether they place an undue burden or restriction on American commerce.

The action follows the US government’s decision on April 30 to designate Vietnam as a “Priority Foreign Country” in its annual Special 301 Report.

Under US trade law, the trade representative is required to decide within 30 days of such a designation whether to launch an official investigation into the practices that triggered the listing.

Ambassador Greer acknowledged that while Vietnam has recently taken some steps to address these concerns, widespread intellectual property ( IP ) infringement continues to damage the competitive edge of American innovators and creators.

“We need to see Vietnam resolve these long-standing concerns, including on a range of IP enforcement issues, in a manner that is sustained and that deters future IP infringements,” he said in a statement dated May 29 from Washington.

The Section 301 mechanism is a powerful tool in US trade policy, historically used to counter what the government considers as unfair foreign practices that harm domestic business interests. Moving forward, the investigation will thoroughly examine Vietnam’s current acts, policies, and practices.

Upon its conclusion, Greer will consult with US President Donald Trump to determine what responsive actions, if any, the US will take to address the findings.