The Department of Commerce is expected to launch a formal investigation Monday into whether Chinese steel companies are shipping steel through Vietnam to avoid U.S. import tariffs, according to a person familiar with the matter.

The decision to investigate follows a complaint in September from U.S. steelmakers, and is an escalation of U.S. efforts to stop a glut of China-made metal from flooding U.S. markets. The inquiry could result in new tariffs on steel imported from China via Vietnam, under rules designed to prevent such...