Cambodia-US tariff talks, experts are cautiously optimistic

Cambodia-US tariff talks, experts are cautiously optimistic

Even as Cambodia and the United States Tuesday kicked off tariff talks in Washington DC, experts shared divergent views with Khmer Times on the possible outcome of the three-day negotiations (May 13-15).

A 19-member high-level Cambodian delegation led by Sun Chanthol, Deputy Prime Minister and First Vice-Chairman of the Council for the Development of Cambodia (CDC) is currently holding trade negotiations with the US representatives.

Cambodia and the United States are engaged in high-stakes trade negotiations, with several strategic and economic issues driving the agenda, according to Anthony Galliano, Vice-President of the American Chamber of Commerce in Cambodia (AmCham Cambodia).

Speaking to Khmer Times yesterday, Galliano, also Group CEO of Cambodian Investment Management Holdings, said the discussion covers key issues such as the trade imbalance, transhipment prevention, supply chain integrity.

“The key issues on the table are addressing the trade imbalance, preventing transshipments, protecting supply chain integrity, Cambodia’s de minimis regime, regional stability and security, strategic balancing and regional influence, and national security concerns.”

A recent report from the General Department of Customs and Excise (GDCE) presented a mixed picture. During the first four months, Cambodian exports to the US reached $3.20 billion—a 22.3 percent increase from the same period last year—while imports from the US rose by 34.8 percent to $97.8 million, he noted.

Galliano pointed out that while this underscores the strength of the bilateral trade relationship, it also highlights the Kingdom’s growing dependence on the US as its largest export market.

“The concentration risk is real. As Cambodia continues to rely heavily on the US, even as imports from the US expand from a relatively small base, he added.

He also cautioned that traditional arguments, such as the inherent trade imbalance between developed and least-developed countries, have gained little traction with the current US administration. “Other areas of reciprocity and compromise will come into play,” he said.

“One of the most pressing concerns for US negotiators is the allegation that Cambodia may be facilitating the transhipment of Chinese goods to evade US tariffs—a practice that violates trade rules.

In response, the Royal Government has issued two key regulations: the Ministry of Commerce Prakas No. 047 and Inter-Ministerial Prakas No. 379, both aimed at combating origin fraud and misdeclaration in exports to the American markets.

“These are positive steps that will support Cambodia’s position in the negotiations,” Galliano said.

The AmCham Vice-President concluded that assurances around national security are also expected to play a central role in the talks, including concerns over the Ream Naval Base, the rise of scam operations in the region, and the future of diplomatic and military cooperation between the two countries.

On the other hand, Chey Tech, a socio-economic researcher, told Khmer Times that national security will naturally be part of the Cambodia-US trade talks, noting that the Royal Government is striving to strike a careful balance between economic cooperation and geopolitical considerations.

Tech said the government is managing its foreign relations and security interests with sensitivity, particularly concerning the Ream Naval Base, which was recently modernised with Chinese support and officially opened to all international partners.

“Since its launch in early April, the Ream Naval Base has welcomed warships from Japan, the Philippines, Vietnam, China, and Russia. This demonstrates the country’s openness and commitment to addressing US concerns over regional security and China’s growing military presence.”

He added that beyond security matters, the Cambodian delegation will also raise key economic goals during the talks, including its Least Developed Country (LDC) graduation and its 2050 development vision, while seeking to expand exports of garments, footwear, and travel goods to the American market.

Tech emphasised that Cambodian exports are not intended to harm or compete with American manufacturers. “The US cannot bring all factories to its own territory,” he said.

“The Kingdom produces low-cost goods made by low-skilled workers—our products serve a different market segment.”

He also said that the government has taken proactive steps on tariffs, with MoC reducing import duties on more than 19 US products from 35 percent to as low as 5 percent, or even zero upon request.

khmertimeskh