Laos braced for blow of Trump tariff threat
"I just live day by day. For now, I still have my business, and the factory is operating as usual," she told AFP, speaking on condition of anonymity in the capital Vientiane.
"I'm not too worried about my daughter's job yet," she added. Then again, she says: "I don't know anything about what the US will decide."
Landlocked Laos - a country of only eight million - has a gloomy outlook as it counts down to a Friday (Aug 1) deadline when Trump says a 40 per cent levy will kick in unless a trade deal is sealed.
The rate is among the highest Trump has touted in his global tariff blitz, which has yielded a handful of deals with countries including Britain, Japan and Vietnam but left dozens others scrambling for a pact.
Laos has limited exports, little leverage and supply chains deeply entwined with US trade rival China.
The United States had a trade deficit of more than US$760 million with Laos last year - singling it out for steep tolls alongside other nations Trump sees as imbalanced business partners.
"A 40 per cent tariff is just a nail in the coffin for any industry trying to ship to the United States," said John F. Somers, head of garment manufacturing firm Diep Vu Co.
Only a handful of factories, mostly in the capital, supply the US market and sales make up only between three and six per cent of the country's gross domestic product.
But with the South-East Asian country already suffering from high inflation and a severe labour shortage, Trump's default tariff could still have a devastating effect, industry insiders say.
"We estimate about 20,000 workers or more could be impacted," said Xaybandith Rasphone, head of the Association of the Lao Garment Industry.
"We're not certain about the exact number yet, but it could easily be higher if companies shut down," said Xaybandith, who is also vice-president of the Lao National Chamber of Commerce and Industry (LNCCI).
He warned between 35 and 40 factories could be affected if buyers are spooked by the tariffs.
"If the tariff stays in place, some factories will definitely close," he said. "Finding alternative markets takes time, negotiations and a lot of effort. It could take years."
Like neighbouring Cambodia and Vietnam, Laos is a hub of the garment industry - producing brands for western markets including Dr. Martens.
But the production of mattresses, silicone products and solar panels also stands to be impacted.
Solar panel manufacturing has exploded in Laos since 2023 and driven up its export figures after Trump hit China with a 50 per cent tariff on the renewable power sources.
However the US trade offensive has focussed on "transshipment" - a practice it alleges some countries use to help China dodge American tariffs by repackaging its goods for American markets.
Casey Tolzman, head of the Lao-American Business Association (LABA), said the explosion of Laos' solar industry had likely been "a cause for suspicion" in Washington.
Rules governing the source of materials and the level of Laotian labour required to define products as domestically produced may prove the country's biggest bargaining chip.
"A big question for countries like Cambodia and Laos is what they can offer the US that's attractive enough to reach a deal," Tolzman said.
"Any deal would probably need to see Laos enforce stricter rules on transshipment and country of origin, to ensure products aren't just coming from China and getting a Laos label slapped on."
The US may also ask Vientiane to crack down on internet scam centres targeting wealthy Americans from compounds in Laos, or seek concessions for American goods to enter the market, he added.
The LABA and LNCCI say they are helping the government draft an appeal asking for tariffs to drop back to previous levels, or at least be capped at 20 per cent.
But Diep Vu Co boss Somers warns even if Laos manages to reach a deal with Washington, a bigger test soon lies ahead.
Laos is on track to graduate from "Least Developed Country" status next year, meaning it is set to lose duty-free access to the European Union - dealing another blow.
"We'll be at a competitive disadvantage, our industry will probably collapse within a few years," Somers warned.
"The real discussion is the EU relationship with Laos, not just what the US is doing." - AFP
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Sun
24 minutes ago
- The Sun
Trump stakes reputation as dealmaker with tariff policy
WASHINGTON: Donald Trump is staking his reputation as a tough negotiator and slick dealmaker -- that has served him well throughout his life -- with his ultra-muscular, protectionist tariffs policy. On Friday, the White House released a picture of the US president seen with a smartphone pressed to his ear, with the caption: 'Making calls. Making deals. MAKING AMERICA GREAT AGAIN!' Every trade deal announced by the president, who is convinced that tariffs are both a tool and manifestation of America's economic might, is celebrated by his supporters as a show of his negotiating prowess. This week's flurry of rate changes was no different. On Thursday, with the stroke of a black marker, the former real estate developer slapped fresh tariffs on dozens of US trade partners. They will kick in on August 7 instead of August 1, which had previously been touted as a hard deadline. The Republican leader's backtracking, frequently setting trade deadlines only to rescind or extend them -- he most recently granted Mexico a 90-day extension -- has given rise to the mocking acronym 'TACO' ('Trump always chickens out'). The jokes implying Trump is all talk and no action on trade have previously struck a nerve for the president. 'Not chicken' But analysts believe there will be no going back this time. Trump has 'not chickened out,' according to Josh Lipsky, an international economics expert at the Atlantic Council think tank. Lipsky told AFP the president is 'following through, if not exceeding' what he vowed during his campaign in respect to tariffs. Matthew Aks, a public policy analyst at Evercore ISI, said he did not anticipate a 'massive shift' on the latest order, aside from some economies like Taiwan or India striking deals during the seven-day buffer. Following crunch negotiations leading up to the tariffs announcement, Trump struck a series of compromises, notably with the European Union, Japan, and South Korea, setting varying tax rates and touting high investments in the United States. The details of these agreements remain vague and leave the door open to key questions: Are exemptions possible? What will become of key sectors like automobiles, pharmaceuticals, semiconductors? And what of China? The US president and leaders of other countries 'have reasons to avoid going into detailed agreements' explained Aks, allowing all sides to present the deals in the most positive, or least negative, way possible to their public. The ability to conclude deals -- often with or without crucial detail -- is, for the 79-year-old Republican, an integral part of his political signature. 'Art form' In his book 'The Art of the Deal,' the billionaire wrote: 'Deals are my art form. Other people paint beautifully on canvas or write wonderful poetry. I like making deals, preferably big deals. That's how I get my kicks.' Trump explained in his book that he always 'protects' himself 'by being flexible.' 'I never get too attached to one deal or one approach.' But despite comments about his trade policy reversals, Trump has hardly budged from his trade strategy, and that could prove politically painful. In a survey conducted by Quinnipiac University published in mid-July, only 40 percent of respondents said they supported the president's trade policy, while 56 percent criticized it. The latest employment figures bear the marks of Trump's protectionist offensive, according to experts. Job creation in May and June was revised sharply downward, falling to levels not seen since the Covid-19 pandemic. - AFP
Sinar Daily
24 minutes ago
- Sinar Daily
Who makes laundry smell nice? Meet the professional 'noses'
HOLZMINDEN - In the laboratories of German fragrance and flavours giant Symrise, a citrus scent clings to the lab coats of trainees, "noses" who are learning the art of making things smell good. These busy heroes of the world of smells and aromas shape the connection millions of consumers have with everyday items. While at high-end perfume labels, olfactory artists create scents for luxury body sprays, Symrise's experts work on everyday products that might range from mint-flavoured toothpaste to barbeque chips. Smell, a powerful sense that can trigger emotions and memories, and aroma often decide which food or beverage, cleaning or personal hygiene product ends up in the shopping cart. At Symrise's headquarters in Holzminden, a quiet town south of Hanover, each day at the company's in-house perfumery school begins the same way: sniffing out scents from dozens of tiny bottles while blindfolded. "It's just like tuning a musical instrument before you play," said Alicia De Benito Cassado, a 32-year-old former professional pianist from Spain. Her career switch into scent development was a natural step: she made her own perfumes as a teenager to match the poetry and music that she wrote. "For me, not everything has to smell good," she said. "The horror of smell also helps us discover ourselves." But commercial clients demand something different, De Benito Cassado added. "In the end, we need to create scents that are strong, beautiful, powerful and affordable." - Professional sniffers - Being a "nose" is a full-time job and comes with a three-year training programme. The smell of a fabric softener can be composed of 80 compounds, far more than in a premium body perfume and the best noses can make out over 1,000 different odours while blindfolded. Junior perfumers (L-R) Attiya Setai, Shangyun Lyu and Alicia de Benito Cassado hold smell strips which are used to evaluate fragrances in a mixing room at the Symrise company, where perfume oil formulas are developed, in Holzminden, central Germany. Photo by Michael Matthey/AFP Shangyun Lyu, 31, came from China to study at the school and says that a professional sniffer can get by with knowing about 500 scents. Being able to break down odours into their chemical components is key. "As a kid, I just smelled jasmine or gardenia as flowers," he said. "Now, I recognise the chemicals: it's a blend of many elements." Students weigh ingredients down to the milligramme, mix, smell and start over, often by replicating existing smells to understand their structure and then innovate from there. "When developing perfume, it is very important that several people smell it," said 56-year-old master perfumer Marc vom Ende, head of the school. "We all perceive smell differently." - 'Nose has the final say' - Pleasant smells cannot come at any cost and the rules of the game change over time. Lilial, a chemical once prized for its floral and sweet Lily-of-the-Valley notes, has been banned in the European Union since 2022 over fears it can cause skin irritation and damage the reproductive system. Fragrances applied directly to the body have stricter regulations than detergents, said 27-year-old South African trainee Attiya Setai. "We're more restricted in raw materials and must replace banned ingredients with new compliant ones," she said. Tastes also vary across global markets, with Shangyun pointing to the example of Chinese shampoos that sell well with a young clientele there but would struggle in Europe. "Something old-fashioned in one country can be new elsewhere," he said. Cost also enters the equation. Symrise extracts aromatic compounds from wood resin, a by-product of the paper industry, in a move "that makes both economic and environmental sense", said vom Ende. It is hard to be a nose. About 500 perfumers work in the industry and 80 of them at Symrise, which has a workforce of 13,000. The company markets about 30,000 products to clients ranging from confectioners to pet food manufacturers and suncream makers. Symrise's competitors include DSM-Firmenich, headquartered in both Switzerland and the Netherlands, as well as Givaudan, another Swiss firm. Artificial intelligence increasingly plays a role, with computer programmes predicting which fragrances will hit the mark. Still, the machines cannot -- yet -- smell, even if they can understand speech and read text. "We're supported by AI," vom Ende said. "But the nose has the final say". - AFP
Malay Mail
an hour ago
- Malay Mail
Bid to relocate US Space Shuttle Discovery faces museum pushback
WASHINGTON, Aug 2 — Tucked inside President Donald Trump's flagship tax and spending bill last month was a little-noticed provision to relocate the iconic Space Shuttle Discovery from a museum outside Washington to Houston. The plan now faces legal uncertainty, with the Smithsonian Institution arguing Congress had no authority to give away what it considers private property—even before accounting for the steep logistical and financial challenges. 'The Smithsonian Institution owns the Discovery and holds it in trust for the American public,' the museum network, which receives substantial federal funding yet remains an independent entity, said in a statement to AFP yesterday. 'In 2012, Nasatransferred 'all rights, title, interest and ownership' of the shuttle to the Smithsonian,' the statement continued, calling Discovery one of the museum's 'centerpieces' that welcomes millions of visitors a year. The push to move Discovery from the Air and Space Museum's site in northern Virginia began in April, when Texas Senator John Cornyn, a Republican who faces a tough primary challenge next year by state attorney general Ken Paxton, introduced the 'Bring the Space Shuttle Home Act,' naming Discovery. The legislation stalled until it was folded into the mammoth 'Big Beautiful Bill,' signed into law on July 4. Its passage allocated US$85 million (RM363.6 million) for the move, though the nonpartisan Congressional Research Service has projected a far higher cost of US$325 million, adding that the Nasa administrator's power over non-Nasa entities is 'unclear.' To comply with Senate rules, the bill's language was modified such that Discovery is no longer named directly. Instead, the bill refers to a 'space vehicle,' though there is little doubt as to the target. Nasa's administrator—currently Transportation Secretary Sean Duffy, serving in an acting capacity—was given 30 days to identify which spacecraft is to be relocated, a deadline coming up on Sunday. End of an era Nasa's Space Shuttle program ended in 2011, after a 30-year run that carried America's post-Apollo space ambitions. The four surviving orbiters—Atlantis, Endeavour, prototype Enterprise, and Discovery—were awarded to Florida, California, New York, and Virginia through a ranked selection process. Discovery, the most flown, was chosen as a vehicle-of-record in a near-complete state, intended for study by future generations. 'There was not a lot of support within Houston to want a shuttle,' space historian Robert Pearlman told AFP, adding that a proposal to house it at Space Center Houston was relatively weak. But after the announcement, Texas—home to the Johnson Space Centre, which oversees NASA's human spaceflight—felt snubbed, and allegations of political interference by then-president Barack Obama swirled. A Nasa inspector general probe found no evidence of foul play. Enormous challenges Relocating Discovery now would pose major technical hurdles. NASA had modified two Boeing 747s to ferry retired shuttles—one is now a museum piece, and the other is out of service. That leaves land and water transport. 'The nearest water entrance to the Potomac River is about 30 miles (48.3 kilometres) away,' Pearlman said—but it may be too shallow for the orbiter and required barge, requiring a 100-mile journey instead. A water transport would require a massive enclosed barge, he added. The US government owns only one such vessel, controlled by the military. Loaning it to a civilian agency would require another act of Congress, and the alternative would involve building one from scratch. Dennis Jenkins, a former shuttle engineer who oversaw the delivery of retired orbiters to their new homes, told the Collect Space outlet he could see costs reach a billion dollars. Nicholas O'Donnell, an attorney at Sullivan & Worcester with expertise in art and museum law, told AFP that assuming Smithsonian has valid paperwork, 'I don't think Secretary Duffy or anyone in the federal government has any more authority to order the move of Discovery than you or I do.' The government could invoke eminent domain—seizing private property for public use—but it would have to pay fair market value or try to sue. The Smithsonian is unlikely to want a court battle, and while it's legally independent, its financial reliance on federal funds leaves it politically vulnerable, said O'Donnell. — AFP
