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Cambodia, US Nearing Agreement on Trade, Phnom Penh Says
Among the ASEAN nations, Cambodia is the most potentially exposed to any sudden shift in U.S. trade policy.
Cambodia and the United States have agreed to a framework for a trade agreement, the Cambodian government announced today, just days ahead of the Trump administration's July 9 tariff deadline.
The announcement came after a virtual meeting between Deputy Prime Minister Sun Chanthol and Sarah Ellerman, the assistant U.S. trade representative for Southeast Asia and the Pacific.
'In this meeting, both sides reviewed and agreed on the draft Joint Statement on Framework for United States-Cambodia Agreement on Reciprocal Trade, which will be released to the public soon,' the government said in a statement. It added that Prime Minister Hun Manet's government 'will continue to cooperate closely with the United States of America to achieve a mutually beneficial trade and investment relationship.'
During President Donald Trump's 'liberation day' tariff announcement on April 2, Cambodia was hit with a 49 percent tariff – the highest of any nation in Southeast Asia. Since then, the Council for the Development of Cambodia (CDC) and the Ministry of Commerce have held three rounds of negotiations with U.S. trade officials, the latest of which took place on June 25.
However, unlike the cases of Vietnam and Indonesia, the reporting on the trade talks between Phnom Penh and Washington has been vague as to what has been discussed during the negotiations or what the impending framework agreement will involve.
Chanthol said recently that Cambodia had submitted a comprehensive set of documents to the U.S. trade authorities. As the Khmer Times reported, 'these include proposed tariff rates, export compliance conditions, and a framework for how U.S. goods would be taxed upon entering the Kingdom.'
While Cambodia's trade negotiations with the U.S. have not received as much attention as its neighbors Vietnam, Indonesia, and Thailand, the potential political impacts of the tariff are perhaps greater here than anywhere else in Southeast Asia.
Of all the nations that rely on the U.S. market, Cambodia is the most exposed to any potential change in U.S. trading conditions. The country exported $9.91 billion worth of goods to the U.S., according to Cambodian government figures. This made up around 37 percent of its total exports, and a whopping 24.8 percent of its gross domestic product for 2024. (The U.S. Trade Representative's Office puts the figure for Cambodian exports higher, at $12.7 billion, as compared to $321.6 million in U.S. exports to Cambodia.)
This trend has continued in 2025, with Cambodian exports totaling $4.35 billion from January to May – a 27 percent increase compared to the same period in 2024. For 2024, total exports stood close to $10 billion.
As such, the imposition of a significant U.S. tariff on Cambodian imports could have a major effect on the country's manufacturing industry, particularly its garment and footwear sectors. During a workers' forum on June 7, Cambodian garment workers expressed their concerns that the 49 percent tariff increase would lead to job losses, worsening working conditions.
Long Sophat, a 38-year-old factory worker in the Teuk Thla area of Phnom Penh, told the forum that a cut in garment orders would likely affect the lowest-skilled workers, Camboja News reported. 'I am afraid my boss will invest in other countries, and working conditions will worsen or result in the loss of job and income. I am responsible for my family, and I have bank debts,' she said.
According to Camboja News, as of last year, the country had 1,555 factories and enterprises, employing nearly 1 million workers, many of them women from rural Cambodia. Mass layoffs in the Cambodian apparel and garment manufacturing sector, should they eventuate, could well result in widespread hardship and potentially political unrest.
Working against Cambodia is the fact that the country has never commanded much attention in Washington – but when it does so, it is often for the wrong reasons. Since the first Trump administration, U.S. officials have become concerned about the country's economic and strategic proximity to China, a concern that has come to center around the Ream Naval Base, the subject of extensive Chinese refurbishment over the past few years.
More recently, questions have been raised about the industrial-scale online scamming operations that have planted themselves firmly on Cambodian soil since the end of the COVID-19 pandemic. In a report last week, the rights group Amnesty International accused the Cambodian government of being 'complicit' in the scamming operations run mostly by Chinese crime syndicates, which have defrauded billions from victims around the world – including the United States. (The Cambodian government has denied this and similar allegations.)
As Trump told Fox News earlier this week, 'We'll look at how a country treats us – are they good, are they not so good – some countries we don't care [about]. We'll just send a high number out,' he said.
All of this compares unfavorably with Vietnam, a nation that was hit with a similarly harsh 46 percent tariff on April 2, but which has grown into an increasingly important strategic partner of the U.S. over the past two decades. Given that Vietnam's recently announced trade agreement will still see the country hit with a 20 percent tariff, it is hard to see how Cambodia can get a much better deal, at least without making substantial concessions on non-trade issues of concern to Washington.
