18/02/2025
Trump’s tariffs on China are a golden opportunity for Cambodia. But if Trump were to target Cambodia with tariffs, it would destroy years of economic progress. In 2024, Cambodia exported $12.7 billion to the U.S. while importing only $322 million in return. This trade imbalance is glaring, especially now that Cambodia no longer enjoys Generalized System of Preferences (GSP) benefits tied to labor rights and working conditions. From Washington’s perspective, this imbalance isn’t just lopsided, it’s unfair. Cambodia must take the initiative in trade diplomacy, demonstrating a commitment to balanced trade. One strategic move can be to offer streamlined, duty-free access for key American products from red states that do not compete with Cambodian industries. This could include U.S. beef, soybeans, farm equipment, and Caterpillar machinery, products that would enhance Cambodia’s industrial productivity while providing affordable protein for Cambodian consumers. Given the small base of U.S. exports to Cambodia, this would have little impact on customs revenue but would serve as a meaningful gesture of economic partnership.
At the same time, Cambodia must recognize a critical red line: The U.S. will not tolerate Chinese military infrastructure on Cambodian soil. The 2024 Republican-drafted GSP renewal bill (now indefinitely stalled) explicitly included provisions restricting military cooperation with China and Russia. While the risk of U.S. tariffs on Cambodia exists, I believe it is unlikely for two reasons. First, Washington’s immediate priority is countering China, and it needs Cambodia, Vietnam, and other Southeast Asian nations to absorb relocated Chinese manufacturing. Second, Cambodia’s primary exports to the U.S. are low-cost shoes, garments, and travel goods that do not directly compete with American industries. Nevertheless, hoping for the best is not a strategy. Cambodia should be proactive, strategic, and diplomatic, securing its place as a valued trade partner, not a target for tariffs.
