Vietnam has emerged as a major beneficiary of supply chain diversification away from China. Electronics assembled in Vietnam face only the 10% Section 122 global surcharge, versus up to 60% for China-origin semiconductor ICs. Intel, Samsung, LG, and Foxconn have all expanded Vietnam assembly operations significantly since 2018.
On a $100,000 BOM, China incurs $60,000 in duty vs $10,000 from Vietnam — a difference of $50,000 per order.
| Source | Duty Rate | Duty Amount | Landed Cost |
|---|---|---|---|
| China | 60% | $60,000 | $160,000 |
| Vietnam | 10% | $10,000 | $110,000 |
| Savings from Vietnam | $50,000 | $50,000 | |
* Estimate for electronics HTS chapters 8541–8542. Actual duty depends on specific HTS code, MPF, HMF, and customs value.Calculate exact duty →
Not necessarily. CBP uses the 'substantial transformation' test — the assembly must meaningfully change the product's character or use. Simple final assembly of China-made sub-assemblies may not qualify. For electronics, sufficient value addition (typically 35-50% of value) in Vietnam is generally required.
Samsung produces most of its smartphones in Vietnam (Hanoi and Thai Nguyen provinces). Intel has major assembly and test operations in Ho Chi Minh City. LG manufactures mobile phones and home appliances. Foxconn and Luxshare have expanded significantly in Vietnam to serve Apple's supply chain needs.
Vietnam has maintained consistent trade policy with the US and signed EVFTA with the EU. However, US trade scrutiny has increased as Vietnam's trade surplus with the US has grown. The 10% Section 122 surcharge applies to Vietnam like all other countries. Geopolitically, Vietnam is considered lower risk than China for US-traded goods.
Vietnam's PCB ecosystem is less developed than China's Shenzhen/Guangdong cluster. Lead times for complex multilayer PCBs tend to be longer. Many Vietnamese PCB shops source laminate and chemicals from China. That said, quality has improved significantly at major suppliers.
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