Cambodia secures US deal to avoid 49 percent tariff hike

Cambodia secures US deal to avoid 49 percent tariff hike

Cambodia is one of only ten countries worldwide to have reached an agreement in principle with the US, preventing the immediate imposition of higher tariffs, Chanthol says.

Cambodia will not face a potential tariff increase of up to 49 percent by the United States after achieving favourable results in countervailing duty negotiations, a move seen as vital for protecting the Kingdom’s key export sectors and safeguarding thousands of jobs.

Sun Chanthol, Deputy Prime Minister and First Vice-Chairman of the Council for the Development of Cambodia (CDC), Monday confirmed that Cambodia is one of only ten countries worldwide to have reached an agreement in principle with the US, preventing the immediate imposition of higher tariffs.

Speaking to reporters during the concrete pouring ceremony for the final section of the Cambodia-China Mekong-Kratie Friendship Bridge, Chanthol said the positive outcome followed three rounds of negotiations between Cambodian and US officials. The first two meetings took place in Washington, DC, in May and June, while a virtual discussion was held most recently on July 4.

“Because we agreed to negotiate sincerely with them, on this 9th (on July 9), our tariff will not be 49 percent,” Sun Chanthol told reporters.

“Cambodia is one of 18 countries negotiating with the United States, and out of those, ten countries, including Cambodia, have reached the stage of issuing a joint statement. So, on the 9th, the tariff rate will not reach 49 percent.”

The Deputy Prime Minister, however, noted that while Cambodia has temporarily avoided the steep tariff increase, the exact new tariff rate has not yet been finalised and is awaiting approval from US President Donald Trump. A joint statement between the two sides is expected once the United States concludes its Independence Day celebrations.

Chanthol went on to add that during the talks, Cambodian negotiators stressed the importance of the garment, bag, and footwear industries, which together employ approximately one million workers. Each worker supports an average of five family members, highlighting the far-reaching social and economic impact of these sectors.

The US side acknowledged this reality and agreed to lower the proposed tariff rate, ensuring Cambodia remains competitive and continues to attract investment in its labour-intensive manufacturing industries.

Chanthol added that of the seven priority export sectors Cambodia sought to protect, around 86 percent have been successfully safeguarded as a result of the negotiations.

The outcome reflects the Royal Government’s continued efforts to defend Cambodian interests on the global stage while maintaining strong bilateral ties with the United States.

Commenting on the significance of the breakthrough, Lor Vichet, Vice-President of the Cambodia Chinese Commerce Association (CCCA), told Khmer Times that Cambodia remains a stable and reliable trade partner of the United States, underscoring the government’s consistent efforts to strengthen economic ties based on mutual respect and trust.

“Cambodia uses the greenback as the functioning currency. Cambodia has never expressed any intention to join BRICS, neither from the executive branch nor the legislative branch,” Vichet said.

“We firmly believe in maintaining an open, transparent, and predictable trade environment that is beneficial to all stakeholders.”

He emphasised that Cambodia’s economic model is built on inclusivity, international cooperation, and adherence to rules-based principles, which has made the Kingdom an attractive destination for foreign investors from around the world, including the United States.

“The Cambodian government has consistently demonstrated goodwill and dedication to ensure that bilateral trade between both nations grows healthily to new heights, heralding a new era of mutual economic growth and prosperity,” Vichet added.

“Our strong and steady partnership with the United States is not only crucial for the stability of Cambodia’s export sectors, such as garments, footwear, and agriculture, but also for the livelihoods of millions of Cambodian workers who depend on these industries,” he added.

Cambodia’s prudent approach to foreign policy and economic diplomacy reflects its desire to remain neutral, business-friendly, and deeply engaged in the global economy without aligning with any one geopolitical bloc.

“Our message to international partners is clear: Cambodia is open for business, committed to fair trade, and ready to deepen cooperation on the basis of mutual benefit,” he said.

It is worth noting that Cambodia and the United States celebrated the 249th Anniversary of US Independence Day and the 75th Anniversary of Cambodia-US Diplomatic Relations at a ceremony held on July 3. Organised by the US Embassy in Cambodia, the event was co-chaired by Chanthol and Ms Bridgette L. Walker, Chargé d’Affaires at the US Embassy in Phnom Penh.

In her opening remarks, Walker highlighted the importance of this year’s milestone—the 75th anniversary of diplomatic relations between Cambodia and the United States—calling it a testament to the strong and enduring friendship between the two nations.

Deputy Prime Minister Sun Chanthol expressed appreciation to the US Embassy for organising the celebration, which he said holds deep meaning not only for Americans but for all who cherish freedom, sovereignty, and tolerance.

He noted that over the past 75 years, Cambodia and the US have built a robust and expanding partnership based on mutual respect and shared interests.

khmertimeskh