Analysis by Anoulak Kittikhoun, a Laotian political scientist, international relations and water diplomacy expert, originally published on Carnegie Endowment for International Peace website.
Under Donald Trump’s current leadership, the United States’ foreign policy has adopted an “America first” stance that emphasizes nationalistic trade policies, anti-war military posturing, and disengagement in multilateral cooperation.
These policies have significant implications for Southeast Asia, including Laos. However, while Trump’s approach may increase Laos’ engagement with China, it will not fundamentally alter Laos’ relations with China or the United States.
This is because Laos has always navigated shifting geopolitical realities and pursued a foreign policy of neutrality (though left-leaning) and a careful balance of power; sympathizing with traditional friends (Vietnam, China, Russia, and Cambodia) while being friendly with its neighbors (Thailand and other ASEAN countries), as well as key powers and partners (the United States, Japan, Australia, India, and European nations) while avoiding superpower conflicts.
Laos’ geography makes it of special interest for the great powers, past and present. During the Cold War, Laos was a key battleground between the United States, the Soviet Union, and China. Laos was not always aligned with China; however, especially during the Sino-Soviet split and China’s military action against Vietnam in 1979, following Vietnam’s deinstallation of the Khmer Rouge in Cambodia.
As for relations with the United States, despite being “the most bombed country on earth” courtesy of America during the Vietnam War, Laos never severed diplomatic ties with the United States. When the Cold War wound down, Laos prioritized improving ties with China (its giant neighbor up north) as well as with the United States (the remaining superpower) and others.
Today, on the economic front, China outperforms the United States on trade and investments in Laos. Laos’ trade with China accounted for USD 8.23 billion in 2024, making China one of the country’s top trade partners. China exported ($3.68 billion) machinery, electronics, and consumer goods to Laos, while Laos exported (USD 4.56 billion) agricultural products (bananas, rubbers, casavas), minerals, and natural resources to China. China’s investment in Laos has also been substantial, as much as USD 10 billion in 2021 and fluctuating between USD 1 to 2 billion in 2023 to 2024, particularly in mining, hydropower, and infrastructure development (for example, the flagship Laos-China Railway under BRI).
Despite high levels of investment and trade with China, Laos has significant commercial relationships with two other countries in the region, especially Thailand (USD 8.5 billion) and Vietnam (USD 2 billion). While U.S.-Laos trade is smaller, it is a growing sector of the relationship, and the United States is becoming an important market for Laos exports, such as coffee and garments. The total volume of two-way trade stands at USD 844 million, with a U.S. trade deficit of USD 763 million in 2024. Despite being a small country, Trump has gone after Laos with a significant 48 percent tariff rate.
These tariffs, pitched as “reciprocal,” were calculated nonsensically. It remains to be seen what the next moves are, but ASEAN, a 670 million population market and the fifth largest global economy, should negotiate as a bloc. Otherwise, ASEAN risks leaving smaller economies behind like Laos, and could further create divisions within the economic bloc. In contrast, China has a zero-tariff policy with Laos since December 2024, promising a further increase in Laos exports to China.
While Trump’s anti-war rhetoric around his administration’s efforts to end the wars in Gaza and Ukraine has been derided as insincere, “transactional,” a “reversal of core U.S. policy,” and “an abandonment of democratic values” by his opponents at home and traditional American allies abroad, it has been quietly appreciated by Laos and other likeminded countries who know all too well the impacts of American-led military (mis)adventures globally for the past eighty years.
While Trump’s America First policy may lead to Europe rearming, his non-commitment to defend Taiwan (compared to Biden’s pledge to defend Taiwan while being ambiguous about Taiwanese independence) and perhaps the Philippines in the case of a conflict with China in the South China Sea has the potential to lessen the risks of conflict in Asia’s two hotspots.
The United States has traditionally been a strong leader in supporting and using multilateral cooperation initiatives in the region such as ASEAN and the Mekong River Commission (MRC) to advance regional stability (for example, managing the influence of China, including its Mekong-Lancang Cooperation mechanism), economic integration, and sustainable development, all previously seen as American interests.
As an active member of both ASEAN and MRC, Laos sees these platforms as key to its regional diplomacy and leadership in the region. Thus, Laos is anxious about Trump’s narrow view of American interests. During Trump’s first term, Trump had little engagement with ASEAN (he skipped most ASEAN summits during his first term), and now, the termination of a USAID grant worth USD 5 million for the MRC portends a future without serious U.S. multilateral engagement in the region.
And while Trump will not necessarily push Laos and others to the Chinese camp, his signals will certainly make these countries recalibrate and seek to increase cooperation with other powers such as Japan, Australia, India, and European nations, as well as China.
Laos will especially be interested in working with these nations on water and climate security where the only effective solution is multilateral cooperation.
The views expressed in this opinion piece are solely those of the author and do not necessarily reflect the editorial stance of The Laotian Times.
About the author:
Dr. Anoulak Kittikhoun is a Laotian political scientist, international relations and water diplomacy expert with two well-regarded books (Small Countries, Big Diplomacy; and River Basin Organizations in Water Diplomacy) and several peer-reviewed articles, one of which won the Reinhard Bendix Best Paper Award from the American Sociological Association. His recent tenure as the 8th CEO of the Mekong River Commission received global recognition for leading the organization to many achievements. With a Bachelor degree from the Australian National University, and Masters and PhD from the City University of New York, he had also worked for the United Nations Headquarters, Ralph Bunche Institute for International Studies and the Lao government, and had been invited to lecture and speak at international conferences in 40 countries.