Laos Encounters Economic Challenges as U.S. Tariff Increase Poses Risk to Crucial Exports
Trump's updated trade policy focuses on Southeast Asia, with Laos facing a total trade barrier of 95 percent.
Laos is preparing for economic upheaval following the announcement of significant new tariffs by the United States under President Donald Trump’s “Liberation Day” policy. Starting this April, Lao exports will encounter a universal tariff of 10 percent and a reciprocal tariff of 48 percent, totaling a direct tariff rate of 58 percent. Considering additional trade barriers, the White House claims a total impact of 95 percent.
Experts caution that this action could significantly harm Laos's agricultural, textile, and manufacturing industries, which have increasingly depended on U.S. markets. Essential exports, such as Lao coffee and footwear, may struggle as American consumers look for less expensive options. This new policy is part of a wider U.S. initiative to address trade deficits, but Laos—along with Cambodia, Vietnam, and Thailand—finds itself caught in the turmoil.
Regional analysts indicate that the tariffs are designed to weaken Chinese economic dominance in Southeast Asia, yet the consequences may be most severe for ASEAN countries. With the potential for job losses, decreased export demand, and disrupted supply chains, Laos now confronts the need to shift focus toward alternative markets like China, while ASEAN leaders begin formulating a response to the crisis.
Experts caution that this action could significantly harm Laos's agricultural, textile, and manufacturing industries, which have increasingly depended on U.S. markets. Essential exports, such as Lao coffee and footwear, may struggle as American consumers look for less expensive options. This new policy is part of a wider U.S. initiative to address trade deficits, but Laos—along with Cambodia, Vietnam, and Thailand—finds itself caught in the turmoil.
Regional analysts indicate that the tariffs are designed to weaken Chinese economic dominance in Southeast Asia, yet the consequences may be most severe for ASEAN countries. With the potential for job losses, decreased export demand, and disrupted supply chains, Laos now confronts the need to shift focus toward alternative markets like China, while ASEAN leaders begin formulating a response to the crisis.
