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Wednesday, April 30, 2025
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Laos Seeks Solutions to Address New United States Tariff Hikes

This Week

Laos’ exports to the United States are expected to face significant impacts following the recently announced tariff increases, prompting the Lao government to seek urgent solutions.

Xaybandith Rasphone, Vice President of the Lao National Chamber of Commerce and Industry (LNCCI), stated that new United States tariff measures pose major concerns for Laos’ export sector, according to the Vientiane Times.

The official noted that despite the 90-day negotiation period and the marginally reduced rate of 10 percent afforded to Laos compared to other affected nations, the economic ramifications of the elevated reciprocal tariffs remained unavoidable.

Within the Association of Southeast Asian Nations (ASEAN), Laos currently faces the second-highest tariff increase at 48 percent, surpassed only by Cambodia. This substantial rate has generated considerable apprehension throughout the country’s export industries.

In response to this economic challenge, the Ministry of Industry and Commerce has initiated collaborative efforts with private sector representatives to formulate appropriate countermeasures.

Xaybandith noted that the government, in cooperation with industry stakeholders, had been conducting a comprehensive analysis of the situation since the tariffs were announced. He emphasized that the task force—comprising leading figures from the private sector—was consulting directly with export-oriented enterprises to craft practical solutions.

He also highlighted that bilateral trade between Laos and the United States reached approximately USD 500–600 million last fiscal year, driven in part by increased activity in special economic zones. This growth, he said, underscores what is at stake should trade relations be disrupted.

The chamber vice president stressed that the manufacturing sector would be hit particularly hard, as tariffs shift from single-digit to double-digit rates. He warned that such changes could threaten employment and slow investment if production operations are forced to pause.

According to Xaybandith, a key challenge for manufacturers lies in their substantial capital investment in production materials, costs that may become unsustainable if American importers reduce or suspend orders.

He further remarked that Laos’ commercial ties with U.S. partners represent years of development and mutual trust. Establishing similar relationships in alternative markets, he noted, would be both time-consuming and resource-intensive.

In closing, the LNCCI representative confirmed that the government intends to carry out detailed deliberations on possible solutions and will undertake a thorough analysis of trade volumes across individual product categories.

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