Place potatoes into a large pot and cover with salted water; bring to a boil. Reduce heat to medium-low and simmer until just tender, about 15 minutes; drain.
Put potatoes into a large bowl; add onion and stir.
Mix sugar, mustard, and salt together in a bowl. Stir just enough vinegar into the sugar mixture to form a paste; season with black pepper.
Whisk remaining vinegar and vegetable oil together in a separate bowl until smooth; stream into bowl with the paste, whisking continually to incorporate. Pour the dressing over the potato and onion mixture.
Cover the bowl with plastic wrap and let salad cool slightly, 5 to 10 minutes.