Cambodia, US to engage in tariff negotiations

Cambodia, US to engage in tariff negotiations

The United States yesterday agreed to Cambodia’s proposal to engage in tariff negotiations, according to a communique released by the Ministry of Commerce.

“The Royal Government received a positive response from the United States side on the request to open negotiations for a common solution after issuing an immediate response through the letter of His Excellency Hun Manet, Prime Minister of the Kingdom of Cambodia, dated April 4, 2025,” read the release.

The statement also pointed out that an inter-ministerial-institutional working group led by Sun Chanthol, Deputy Prime Minister and First Vice-President of the Council for the Development of Cambodia, and the US side will open talks soon.

This development coincides with President Trump suspending tariffs for 90 days, on Wednesday, for all countries, including Cambodia.

However, representatives of various business segments in the Kingdom believe that the road ahead offers a tough ride.

An American businessman, who has been a long-time resident in the Kingdom, told Khmer Times that the decision was not made out of concern for countries such as Cambodia. It was taken after Americans started losing money in stock markets, retirement investments and other areas.

“This pause should not be treated as a relief, but a period for firm action.”

He said countries must re-evaluate their trading patterns with the US while discovering new opportunities and markets.

“Chinese electric vehicle major BYD is a typical example. It’s now ahead of Tesla and has achieved the milestone by not tapping the US market alone but successfully establishing its presence in many emerging markets.”

He pointed out that Cambodia, while discovering new value chains, must emphasise on high value chains and not low value chains. “The world is changing, and there are emerging markets that have the capacity to absorb Cambodian goods. And this challenge should be seen as an opportunity to explore that route.”

He asserted that the ways to overcome this challenge lie in embracing technologies, switching export markets, diversification of industries, along successfully building a knowledge-based society.

Speaking to Khmer Times, Robert Hwang, Deputy Chairman of Textile, Apparel, Footwear and Travel Goods Association of Cambodia (TAFTAC) and Chairman of Cambodian Garment Training Institute, said: “We at TAFTAC find the 90-day tariff suspension a great relief. However, as the tariffs have only been suspended, we are interested in future negotiations between the Cambodian government and the US government.

“We also believe that productivity improvements and cost reductions are very important to prepare for the uncertainties ahead. We also hope that the government will support our ongoing requests, such as reducing logistics costs, lowering electricity rates, and allowing solar power installations without compensation.”

Vikas Reddy, a researcher in economics and international relations at Ohio University, said that the development should be a welcome news for Cambodia and other Asean countries.

“I am optimistic that Cambodia and other Asean countries can arrive at an amicable agreement during this period of 90 days as none of these countries have adopted any retaliatory measures.

Asean needs the US as much the US needs Asean.”

khmertimeskh