US Imposes New Tariffs on Cambodian Imports: Trade Dynamics and Implications

The US has imposed new tariffs, averaging 49% on Cambodian imports, justified by claiming a 97% average tariff on US goods in Cambodia. Trade between the two countries increased in 2024. Lor Vichet from CCCA suggests the tariffs aim to reduce trade imbalances and stimulate US investment, but may not significantly impact Cambodia due to potential for negotiation and low current imports.

On April 3, the United States government declared new customs duty rates, impacting imports from various trading partners, including Cambodia. Under President Donald Trump’s policy of “Reciprocal Tariffs,” Cambodian goods entering the US will face an average tariff rate of 49%. The Trump administration asserts that imports from the US into Cambodia encounter a substantially higher average tariff rate of 97%.

Bilateral trade data from Cambodia’s General Department of Customs and Excise indicated that in 2024, trade between Cambodia and the US reached a total of $10.18 billion, representing an 11.2% rise from 2023. Notably, Cambodian exports to the US amounted to $9.92 billion, marking an increase of 11.4%, while imports from the US were valued at $264.15 million, a 2.7% increase.

The US remains Cambodia’s foremost export market, constituting 37.9% of total exports, with Vietnam at 13.8%, China at 6.7%, and Japan at 5.4%. Cambodian exports predominantly consist of garments, travel goods, and footwear. Lor Vichet, the vice-president of the Cambodia Chinese Commerce Association (CCCA), highlighted that the newly imposed duties by the US are applied across nearly all trading partners.

Vichet clarified that the US government justifies these tariffs based on the existing tariffs imposed by other nations, including Cambodia’s purported 97% rate on US goods. He compared these to tariff rates for neighboring countries, noting that for Vietnam, where the US claims a 90% tariff is imposed, the new US rate is set at 46%. For Thailand, the figures are 72% and 36% respectively, while Malaysia starts at 47% and drops to 24%.

He asserted that the US government’s setting of customs duty rates aims to address three main objectives: reducing the trade imbalance, stimulating foreign investment within the US, and diminishing the economic influence of BRIC countries (Brazil, Russia, India, and China). Vichet opined that these new tariffs will likely not greatly affect Cambodia, as negotiations for lower import duties on US goods remain a viable option.

Moreover, Vichet noted that Cambodia’s reliance on the US dollar as its currency provides additional negotiation leverage. He further mentioned that the claimed 97% tariff by the US likely pertains primarily to automotive products, many of which are assessed tariffs exceeding 100%, while other goods attract lower rates. Despite progress in Cambodia’s export market, he acknowledged the need for time for further development.

In summary, the recent tariff adjustments by the United States reflect an effort to address trade imbalances and foreign investment patterns among its trading partners, imposing an average tariff rate of 49% on Cambodian goods in response to claimed higher tariffs in Cambodia. While this approach may impact trading dynamics, Cambodia retains opportunities for negotiation and should not experience significant detriment due to the existing low levels of imports from the US. Continued monitoring of trade relations is anticipated, indicating potential for improvement moving forward.

Original Source: m.phnompenhpost.com