As the US-China trade war continues, Vietnam has vowed to take action against firms illegally using ‘Made in Vietnam’ labels on items exported to the US to avoid heavy tariffs. Though many exporters have started shifting production from China to Vietnam, some are illegally claiming their goods, including textiles, are from Vietnam despite their Chinese origin.

The development has hit the reputation of Vietnamese businesses and goods, Vietnam’s Deputy Prime Minister Pham Binh Minh was quoted as saying in an official report published recently on the government website.

After Vietnamese customs officials reportedly uncovered dozens of cases of incorrectly labelled goods destined for the United States, Europe and Japan, the government called for more stringent inspection of exports to those markets and said Vietnam could be punished by the United States if it failed to stem the problem, according to a global newswire.

In the first three months of this year, US imports from Vietnam reached nearly $16 bn, up 40 per cent from the same period last year, according to US trade data. According to a poll by the American Chamber of Commerce in China, around half of all US firms working in China say they are considering shifting production from China as a result of the trade dispute.