Cambodia Navigates Shifting US Trade Landscape

Ambiguity Clouds New Tariff Agreements

Cambodia’s capital sees a return to familiar trade dynamics amidst evolving agreements with the United States, according to local policy analysts. The situation is likened to resetting the clock, as the nation’s tariff rates largely align with regional neighbors.

Expert Views on Trade Deal Ambiguity

Ou Virak, founder of Future Forum, a public policy think tank, described the current trade climate as akin to a race where outperforming competitors, not necessarily the primary threat, is key. He anticipates the overall trade environment will remain largely unchanged.

Regarding the garment sector, Ou Virak expects minimal impact, noting that the U.S. is unlikely to significantly boost its domestic production of such goods. He also pointed out the limited effect of Cambodia’s concessions on U.S. products, given the low volume of imports from America.

However, former World Trade Organization chief economist Robert Koopma highlighted the intentional vagueness in the language used for these tariff deals. Speaking to CNA’s Asia First, he contrasted these agreements with typical, highly detailed trade pacts.

“The deals made so far have very few details. He said the deals “allow the US president to declare victory”, while most US trading partners have basically decided not to retaliate to get a relatively lower tariff than what was threatened.”

—Robert Koopma, Former WTO Chief Economist

Koopma elaborated that these deals permit both parties to claim success, with the specific outcomes yet to be fully defined and likely to be interpreted favorably by each side over time. This situation could prolong negotiations and introduce ongoing uncertainty for businesses involved in international trade.

The U.S. Chamber of Commerce notes that in 2023, Cambodia exported approximately $1.2 billion in goods to the United States, with apparel and footwear being significant components (U.S. Census Bureau).