Latest news with #Cambodia-US
The Star
2 days ago
- Business
- The Star
Comment: What can Cambodia offer the US ahead of third round of tariff negotiations?
PHNOM PENH: As Cambodia and the US prepare for a potential third round of negotiations regarding the heavy tariffs imposed on Cambodian goods, the stakes could not be higher for the Cambodian economy. The current situation — where the US maintains a 49% tariff on a broad range of Cambodian exports — is unsustainable for a developing country that relies heavily on international trade. This trade barrier threatens not only Cambodia's economic stability but also its attractiveness as a regional investment destination. The second round of negotiations ended without a concrete agreement, leaving both sides with open expectations and diplomatic uncertainty. As the third round approaches, Cambodia must reconsider its approach and think strategically about what it can offer the US — both as a gesture of goodwill and as a calculated move to regain economic advantage. The US remains one of Cambodia's most important export markets. In 2023 alone, the Kingdom exported over $8 billion worth of goods to the US, primarily garments, footwear and travel goods. With the new tariffs, many of these goods are now subject to nearly 49% import tax — crippling their competitiveness in the US market. Even more concerning is the broader implication: Chinese investors and manufacturers, who had shifted to Cambodia in previous years to avoid US-China trade disputes, are now beginning to pull out. If Chinese businesspeople, who have been instrumental in building Cambodia's manufacturing base, decide to relocate to Vietnam, Indonesia or Bangladesh, the long-term damage to Cambodia's industrial ecosystem could be devastating. It is clear that without a breakthrough in negotiations, Cambodia risks economic isolation and a significant loss in employment opportunities, foreign direct investment, and GDP growth. This is why Cambodia must consider making the first concession. In diplomacy, small symbolic actions can unlock large strategic benefits. Cambodia must recognise that the US is not only negotiating as an economic power but also as a political actor with global norms and values. The deterioration of Cambodia-US relations began in 2017, when the Cambodian government accused the US of supporting a 'colour revolution' and took a number of aggressive actions against the opposition, particularly the Cambodia National Rescue Party (CNRP). Since then, several high-profile political activists with alleged ties to the United States have been arrested or exiled. To move forward, Cambodia could consider making a political goodwill gesture before the third round of talks. For example, the early or conditional release of certain political prisoners — particularly those with clear connections to US institutions or civil society organisations — could demonstrate a spirit of compromise. This would not only help repair trust but also provide the US with a tangible outcome to present to its own domestic stakeholders, especially members of Congress who remain critical of Cambodia's human rights record. The US has long maintained a dual-track policy toward Cambodia: one based on economic engagement and another focused on human rights and democratic governance. Unlike China, the US does not provide aid or investment without conditions. The US seeks reciprocity in political values — freedom of expression, multiparty democracy and rule of law. Thus, even as Cambodia hopes for economic relief, it must understand that US negotiators are likely to push for more than trade concessions. They may seek reassurances on political reform, media freedom, and the reopening of democratic space. Pre-emptively addressing these concerns could help create a more favourable environment for the third round of discussions. It is important for Cambodian leaders to see beyond short-term national pride and recognise the broader geostrategic context. While China remains Cambodia's closest political and economic ally, China itself is now looking for ways to stabilise its relationship with the US, especially in the trade sector. China's priority is to show that it can be a strong and credible actor on the global stage. In this context, Cambodia must also demonstrate that it is a 'qualified friend' — not one that simply asks for help, but one that brings value to the relationship. China wants to support strong, stable and strategically useful allies. If Cambodia appears diplomatically isolated or economically weak, even China's support may become more conditional. The best way for Cambodia to prove its strength is to show that it can negotiate effectively with global powers like the US while maintaining its own dignity and national interests. Cambodia's leadership has repeatedly emphasised national sovereignty and pride, which are valid principles. But diplomacy requires pragmatism. By taking a calculated step toward political openness, Cambodia stands to gain not only economic relief but also renewed credibility on the world stage. This is not about surrendering national dignity — it is about safeguarding Cambodia's economic future. The third round of negotiations offers a narrow but real window of opportunity. Cambodia should walk into that room not as a passive petitioner, but as a proactive and responsible partner ready to contribute to a shared solution. The US is not asking Cambodia to become its ally against China. What it wants is clear: respect for democratic norms, transparent governance and political accountability. Offering the first concession — on Cambodia's own terms — could redefine the trajectory of bilateral relations for the better. All in all, Cambodia is at a crossroads. The current trade impasse with the US must be resolved not through confrontation, but through strategic compromise. A well-thought-out gesture — particularly one rooted in political goodwill — could unlock immense economic and diplomatic benefits. Now is the time for courage, not defiance. By showing a willingness to engage constructively, Cambodia can not only win favour in Washington but also retain the respect and support of its friend in Beijing. This delicate balancing act requires wisdom, timing and a clear understanding of what Cambodia must give in order to get what it truly needs. - The Phnom Penh Post/ANN *** Seun Sam is a policy analyst at the Royal Academy of Cambodia. The views and opinions expressed are his own.
Fibre2Fashion
28-05-2025
- Business
- Fibre2Fashion
Cambodia cuts GDP growth projection to 5.2% for 2025, 5% for 2026
Cambodia has cut its gross domestic product (GDP) growth projection to around 5.2 per cent for this year and to 5 per cent for the next from over 6 per cent earlier due to the anticipated impact of US trade tariffs. Before the tariffs were announced, the growth projection stood at around 6.3 per cent for both 2025 and 2026 and around 6.5 per cent for the medium term (2027-2028). 'The decrease is due to the expected impact of reciprocal tariffs policy on export-serving sectors,' according to a recent report on the 'Budget Strategy Plan 2026-2028 and the Preparation of the Finance Management Bill for 2026'. Cambodia has cut its GDP growth projection to around 5.2 per cent for this year and to 5 per cent for the next from over 6 per cent earlier due to the anticipated impact of US trade tariffs. If the external situations worsen and the talks with the US do not yield expected results, the growth will further decline, a government report noted. The first round of talks with the US recently got over. If the external situations worsen and the talks with the United States do not yield expected results, the growth will further decline, the report noted. The ad hoc Cambodia-US bilateral relations coordination working group led by Deputy Prime Minister Sun Chanthol recently wrapped the first round of talks with the United States, a domestic media outlet reported. Fibre2Fashion News Desk (DS)
The Star
03-05-2025
- Business
- The Star
Cambodia-US trade negotiations scheduled for May 14-15
A man shops for shoes from a Nike store at an outlet in Los Angeles, California on April 10, 2025. Trump on April 9 announced a 90-day pause on the most onerous new tariffs on imports to the United States for every country except China. Americans spend about $31 billion on sneaker brands with almost all sneakers in the US market coming from Asian countries of Vietnam, China, Indonesia and Cambodia, as Trump tariffs impose a new consumption tax of at least 42% on most inbound sneakers to the United States. - AFP PHNOM PENH: Economists are optimistic that Cambodia will see positive outcomes from upcoming bilateral trade negotiations with the US, set to take place in Washington, D.C., on May 14–15. On the morning of May 2, the Office of the Spokesperson of the Royal Government of Cambodia issued a press release stating that Sun Chanthol Deputy Prime Minister and first-vice president of the Council for the Development of Cambodia (CDC), and Cham Nimul, Minister of Commerce, led the AD Hoc Cambodia-US Bilateral Relations Coordination Working Group in a virtual conference with the US Trade Representative (USTR), led by Sarah Ellerman, assistant USTR for Southeast Asia and the Pacific. 'The Royal Government, led by Prime Minister Hun Manet will continue to cooperate closely with the US to achieve a mutually beneficial trade and investment relationship,' said a spokesperson unit press release. Lor Vichet, an economist and vice-president of the Cambodia Chinese Commerce Association (CCCA), expressed confidence that the government is demonstrating a strong commitment to promoting trade cooperation with the US — through efforts such as increasing imports from the US and a commitment to reducing certain import tariffs. He added that if the negotiations yield positive results, Cambodian-made goods will gain broader access to the US market. At present, Cambodia's production output continues to rise, particularly in the apparel, footwear, travel bags, bicycles, vehicle tires and some agricultural products. Vichet noted that for smoother negotiations, Cambodia must also be committed to increasing imports of US products to help create a more favourable environment for trade discussions. 'Because Cambodia has very competitive labour costs, if the US eases import tariffs on our products, more Cambodian goods will enter the American market. However, Cambodia also needs to make purchases of US-made goods,' he told The Post on May 2. 'For the negotiations to bear fruit, Cambodia should offer trade terms such as committing to increase imports from the US from around US$300 million per year to over US$1 billion in the future. Additionally, the Cambodian government could consider the possibility of reducing import tariffs on US goods to zero in order to make the talks more attractive to the US,' he added. According to the General Department of Customs and Excise of Cambodia (GDCE), in 2024, trade between Cambodia and the US reached US$10.18 billion, a rise of 11.2 per cent. Of this, Cambodian exports totalled US$9.9 billion (up 11.4 per cent), while US imports amounted to US$264.14 million. The US administration, led by President Donald Trump, announced a new round of 'reciprocal' tariffs on April 3. However, their implementation was delayed for 90 days, ostensibly to allow for negotiations. The US imposed a 49 per cent import tariff rate on Cambodian goods — the highest of any Asean countries. The rate was calculated on the 2024 bilateral trade imbalance between Cambodia and the US. - The Phnom Penh Post/ANN
