Cambodia Agrees to a Reduced Tariff and Breathes a Sigh of Relief
Cambodia is a key manufacturer in the global garment and footwear industry, making apparel and sneakers for brands such as the Gap, Levi's and Nike. While much of the focus on the U.S. trade talks in Southeast Asia has been on bigger economies such as Vietnam and Indonesia, Cambodia was arguably facing the biggest hit from U.S. tariffs, more so than any other country in the region.
When President Trump announced his 'liberation day' tariffs on April 2, Cambodia was hit with a 49 percent tariff, the highest of any nation in Southeast Asia. This was a big blow to a poor country that was heavily exposed to the United States, Cambodia's single largest export market. In 2024, U.S. exports made up around 37 percent of its total exports, and a whopping 25 percent of its gross domestic product.
The initial 49 percent tariff stunned the country's garment manufacturers and its million garment workers, who feared job losses and worsening labor conditions.
In an interview, the country's deputy prime minister, Sun Chanthol, said a 19 percent tariff meant that the United States had slashed the rate by 61 percent, which he says is the largest reduction in terms of percentage given to any country.
'I'm going to express our appreciation to President Trump and to the U.S.,' said Mr. Sun Chanthol, who has led multiple rounds of negotiations with the United States.
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