Private sector mobilises efforts to respond to 36% US tariff

Private sector mobilises efforts to respond to 36% US tariff

The forum explores urgent measures aimed at stabilising Cambodia’s export capacity, protecting employment, and restoring investor confidence.

The Cambodian private sector Thursday began mobilising efforts to respond to the newly confirmed 36 percent tariff on exports to the United States, set to take effect on August 1.

A high-level discussion titled, ‘New US Tariff Impact and Export Competitiveness Measures’ was convened under the Government-Private Sector Forum (G-PSF) framework, chaired by Kith Meng, President of the Cambodian Chamber of Commerce, Chairman coordinating private working groups for G-PSF, and Chair of ASEAN Business Advisory Council (ASEAN-BAC) Cambodia.

According to a statement issued, the meeting brought together 16 co-chairs of private sector working groups, representatives from national and international trade bodies, business associations, international chambers of commerce, and key leaders from various private sector institutions.

The meeting addressed the competitiveness shock posed by the new US tariff and coordinated an aligned response from the private sector. The scope of the tariff’s impact is expected to affect a wide range of industries, including light manufacturing, agro-industry, garments, footwear, travel goods, logistics, and energy-related sectors. Other areas with exposure to US sourcing decisions or potential future tariff risks may also experience indirect consequences.

The forum discussed urgent measures aimed at stabilising Cambodia’s export capacity, protecting employment, and restoring investor confidence. A unified position from the private sector is being prepared for presentation to the Royal Government, with a proposed package of emergency and medium-term policy recommendations.

Discussions during the meeting covered challenges and sector-specific risks, notably in the garment, footwear, and travel goods industries, along with logistics, agriculture and agro-processing, manufacturing, and energy and gas sectors.

The outcomes of the meeting are expected to guide future dialogue with government stakeholders as Cambodia navigates the implications of the tariff policy shift.

Lim Heng, Vice-President of the Cambodia Chamber of Commerce (CCC), said on Thursday that it is too early to determine the full impact of the upcoming US reciprocal tariff on Cambodian exports.

“We do not yet know how much impact the US reciprocal tariff will have on Cambodian goods. We can assess this only after the tariff takes effect on 1 August,” he said.

Heng noted that when the US previously imposed a 49 per cent tariff on Cambodian products, the extent of the impact was unclear. “Any early assessment risks exaggerating the situation,” he added.

The main focus of the meeting was to study and understand the initial effects of the tariff, Heng explained.

He also highlighted that Cambodia’s economy is not solely dependent on the US market. Although the Generalised System of Preferences (GSP) preferential treatment has expired, exports to the US continue to increase under Most Favoured Nation (MFN) tariffs, as the US remains a member of the World Trade Organisation.

Cambodia currently benefits from trade agreements such as the European Union’s Everything But Arms (EBA), the Regional Comprehensive Economic Partnership (RCEP), and free trade agreements with China, South Korea, and the United Arab Emirates.

“If production and exports to the US are affected, manufacturers can redirect goods to these other markets. The opportunities remain,” he said.

Heng urged stakeholders not to panic, saying the US government does not intend to impose tariffs that would severely harm developing countries or their trading partners. “They carefully study the effects before implementing such measures,” he added.

The US has reduced the reciprocal tariff imposed on Cambodian goods from 49 percent to 36 percent, following weeks of bilateral discussions. The announcement was made during a press conference held on July 8, by Deputy Prime Minister Sun Chanthol, First Vice Chairman of the Council for the Development of Cambodia (CDC) and Chair of the ad hoc Cambodia-US Bilateral Relations Coordination Working Group.

khmertimeskh