Hawking merchandise outside the clothing factory where her daughter works inside, a vendor from Laos assesses the impact of US President Donald Trump's warning about potential trade tariffs that could disrupt their sources of income.
"I'm just living one day at a time. For now, I still have my business, and the factory is running normally," she said to AFP, speaking under the condition of anonymity in the capital city of Vientiane.
I'm not overly concerned about my daughter's employment at this point," she mentioned. On the other hand, she states, "I have no idea what the US will choose.
Landlocked Laos, a nation with a population of just eight million, faces a bleak future as it approaches a Friday deadline, after Trump announced that a 40 percent tax will take effect unless a trade agreement is reached.
The rate is one of the highest Trump has promoted in his worldwide tariff campaign, which has resulted in a few agreements with nations such as Britain, Japan, and Vietnam, while leaving many others trying to secure a deal.
Laos possesses minimal export activities, limited influence, and its supply networks are closely linked with the United States' commercial competitor, China.
The United States recorded a trade deficit exceeding $760 million with Laos in the previous year, making it a target for significant tariffs, along with other countries that Trump views as having unbalanced trade relationships.
"A 40 percent tax is essentially the final blow for any industry aiming to export to the United States," said John F. Somers, head of the garment manufacturing company Diep Vu Co.
Just a few factories, primarily located in the capital, serve the US market, with sales accounting for roughly three to six percent of the nation's gross domestic product.
However, given that the Southeast Asian nation is already dealing with high inflation and a significant shortage of workers, experts in the industry claim that Trump's standard tariff could still result in severe consequences.
'Cause for suspicion'
"Approximately 20,000 workers or more might be affected," said Xaybandith Rasphone, head of the Association of the Lao Garment Industry.
"We haven't confirmed the precise figure at this point, but it might significantly increase if businesses close down," mentioned Xaybandith, who also serves as vice-president of the Lao National Chamber of Commerce and Industry (LNCCI).
He cautioned that between 35 and 40 factories might be impacted if purchasers become alarmed by the tariffs.
If the tariff remains, certain factories will certainly shut down," he stated. "Identifying new markets requires time, discussions, and significant work. It might take several years.
Similar to neighboring Cambodia and Vietnam, Laos serves as a center for the clothing industry — manufacturing items for Western markets such as Dr. Martens.
However, the manufacturing of mattresses, silicone items, and solar panels could also face consequences.
The production of solar panels has significantly increased in Laos since 2023, boosting its export numbers following Trump's imposition of a 50 percent tax on renewable energy technologies from China.
Nevertheless, the US trade campaign has centered on "transshipment" — a method the US claims certain countries employ to assist China in circumventing American tariffs by repackaging its products for the US market.
Casey Tolzman, leader of the Lao-American Business Association (LABA), mentioned that the rapid growth of Laos' solar sector had probably raised "doubts" in Washington.
'A big question'
Regulations that determine the origin of materials and the extent of Lao labor needed to classify goods as locally made could become the nation's most significant negotiation tool.
"A major issue for nations such as Cambodia and Laos is what they can present to the US that is appealing enough to secure an agreement," Tolzman stated.
Any agreement would likely require Laos to implement tighter regulations on transshipment and origin, to make sure items aren't merely coming from China and being labeled as Laos-made.
The United States could also urge Vientiane to intensify efforts against online fraud operations that target affluent Americans residing in facilities located in Laos, or it might pursue advantages for American products to gain access to the market, he further mentioned.
The LABA and LNCCI claim they are assisting the government in preparing an appeal aimed at reducing tariffs to prior levels, or at minimum setting a cap at 20 percent.
However, Diep Vu Co's boss Somers cautions that even if Laos succeeds in reaching an agreement with Washington, a more significant challenge is soon to come.
Laos is expected to transition out of "Least Developed Country" status next year, which means it will no longer qualify for duty-free access to the European Union — adding another challenge.
"We'll face a competitive disadvantage, and our industry might collapse within a few years," Somers cautioned.
The actual conversation is about the EU's connection with Laos, rather than solely focusing on the actions of the US.