‘Tariffs not yet become a disaster to worry about’

‘Tariffs not yet become a disaster to worry about’

Trump tariffs have begun to slightly impact the production chains in the Kingdom but it has not yet become a disaster to worry about, said Kaing Monika, Deputy Secretary-General of the Textile, Apparel, Footwear and Travel Goods Association in Cambodia (TAFTAC).

This came as he spoke at a forum held under the theme ‘Cambodia’s Economy in the Context of US Reciprocal Tariffs’ at the Cambodia-Korea Cooperation Centre, Phnom Penh, on Monday.

“There is definitely a panic, especially among the exporters here as about 40 percent of the Kingdom’s exports go to the US.”

He said the businessmen in the Kingdom remain hopeful as the second round of negotiations between Cambodia and the US over reciprocal tariffs are set to begin.

Shedding light on solutions during these challenging times, Kaing Monika said enhancing capacity along the production chains, value-addition at every stage of production, integrating advanced technologies and fostering innovation are some of the ways to boost the manufacturing sector to turn these challenges into great opportunities.

The discussions at the forum provided a clear understanding of the government’s policy including proactive approach on internal economic reforms, attracting quality investment, and strategic market expansion, which will hold the key towards ensuring the continued growth and stability of Cambodia’s crucial garment and manufacturing sectors.

Penn Sovicheat, Secretary of State and spokesman of the Ministry of Commerce, said diversification of export markets remains the long-term solution.

“As the US is the biggest market for Cambodia’s products, diversifying trade partners is seen as a strategic and crucial step to ease risks associated with dependence on a single market.

“Cambodia has been actively focusing on RCEP, alongside bilateral FTAs with major economies like China and South Korea, to broaden its export horizons,” Sovicheat said at the forum.

Meas Soksensan, Secretary of State and spokesman at the Ministry of Economy and Finance, echoed the same sentiment, underscoring the importance of easing procedures to do business.

“The government has actively sought to expand markets with other major countries and attract more foreign investors to come to the country,” he said.

He also emphasised the streamlining of administrative processes, reducing bureaucratic complexities, and improving regulatory transparency to promote the flow of investments into the Kingdom.

On April 2, 2025, US President Donald Trump announced reciprocal tariffs on Cambodia and at 49 percent it remained the highest imposed on any Asean country.

On April 9, the US decided to suspend the implementation of reciprocal tariffs for 90 days to allow time for negotiations.

Cambodian Prime Minister Hun Manet had sent a letter to the US President expressing his commitment to import more American products as well as reducing tariffs on 19 American goods from 35 percent to five percent.

The Royal Government is anticipating positive results from its ongoing tariff talks with the US, as the Ad Hoc Cambodia-US Bilateral Relations Coordination Working Group led by Sun Chanthol, Deputy Prime Minister and the First Vice-Chairman of the Council for the Development of Cambodia conducted its first round of talks with the US officials from May 13-15.

khmertimeskh