On April 2, 2025, former U.S. President Donald Trump unveiled a controversial new wave of tariffs, triggering global concern. Among the most severely affected is Cambodia. It faces an unprecedented 49% tariff rate—the highest imposed globally under the plan. Trump’s 49% tariff on Cambodia is set to take effect on April 9. This aggressive move threatens to derail Cambodia’s economy.
It may also strain the over 75 years of diplomatic relations with the United States. Additionally, it raises serious questions about Washington’s commitment to economic partnerships with Asia. This is concerning despite the regional bloc’s status as a comprehensive strategic partner.
Exports make up about 70% of Cambodia’s GDP, and the United States is the country’s largest market. The United States received approximately $9.9 billion. This is 35% of the $26 billion in goods that Cambodia exported to the rest of the world in 2024. In a nation of 17 million people, the majority of these are the garment, footwear, and travel goods (GFTs) industries.
These industries employ over 800,000 Cambodians, primarily women. Despite Trump’s 49% tariff on Cambodia, the goods that Cambodia exports to the United States have doubled. This increase occurred over the past five years. They went from $5 billion in 2020 to nearly $10 billion in 2024. At the same time, imports from the US to Cambodia are stable and rise from $250 million to $320 million.
The main imported goods include cars, machinery, electronic equipment, and beverages, among others. There is an imbalance in trade between the two sides, which favors Cambodia. However, the kingdom appreciates the kind consideration extended by the U.S. government. The thoughtfulness of the United States toward Cambodia is demonstrated by this trade relationship. If Trump’s 49% tariff on Cambodia takes effect next week, it will jeopardize the existing good bilateral relations. The US and Cambodia may face strained ties. This could damage relations beyond imagination.
The goodwill for a small developing country like Cambodia will, unfortunately, fade away at the expense of another extra-regional power. This power is sure to take full advantage of the vacuum that America leaves behind. As a result, Phnom Penh and Washington should quickly engage in dialogue. They should be able to reach a fair trade balance through compromise.
This will help avoid using the highest reciprocal tariffs against small countries like Cambodia. Trump’s plan to raise tariffs definitely hurt Cambodia’s economy. The economy grew 7% a year before COVID-19 but is expected to drop to 6% in 2025. Cambodia relies heavily on exports, making it vulnerable to changes like these tariffs. This is especially crucial since the U.S. is its biggest export market.
American consumers would be deprived of relatively inexpensive Cambodian-made goods, particularly clothing, as a result of this increase in tariffs. American companies, like Nike, now have to decide whether to absorb the costs or pass them on to consumers. They might also choose suppliers from other countries like Mongolia or Bangladesh, which would have lower tariffs.
The last option is the most likely choice for these companies, standing at 10% or 37%, respectively. Though the U.S. is Cambodia’s largest single-country export destination, it remains Cambodia’s largest to date. Trump’s 49% tariff on Cambodia will rise at the set rate of 49%. Consequently, Cambodia’s economy could shrink sharply, reducing substantially the country’s exports to the U.S. These exports stand at 30% of the country’s GDP.
If Cambodia loses favorable export market access in the U.S., it could mean a loss of 4-5 billion USD in revenue. This would dampen the current economy, valued at around $51.39 billion in 2025. Garment factories, which operate on thin profit margins (5-10%), might immediately cut their labor forces. This could cost hundreds of thousands of jobs and deprive rural families of their reliance on labor wages. The poverty rate in Cambodia would wretchedly increase.
This would affect livelihood and inflict poverty with poorer health, inadequate shelters, weak education, and increased social haphazard. Cambodian exporters would have no choice but to turn more to China for alternative market access. The government may have to rely more on China for economic security. They will also need investments to mitigate the dire consequences of Trump’s 49% tariff on Cambodia.
This would have effects on the geopolitical landscape that could push Cambodia away from free-market principles. It could shift Cambodia toward a more socialist model, where state-owned enterprises played predominant roles. Such a shift may also deter the U.S. from maintaining its long-standing friendship with Cambodia. These situations with Trump’s 49% tariff on Cambodia could be potentially grave. Cambodia should exercise its agency wisely. Cambodia must utilize all available options to avoid these tariffs. It is also crucial to reduce the negative impact as much as possible.
Immediately, Cambodia should seek serious dialogues with the U.S. to postpone the imposition of this decision. They should seek clarification on President Trump’s tariff announcement. It is important to verify which Cambodian goods are subjected to Trump’s 49% tariff. This will help manage the damaging effects and explore alternative trade settlements. Such settlements can be readjusted for a more balanced tariff solution between Phnom Penh and Washington.
Additionally, Cambodia should consider adjusting its tariff policies. They could offer to lower tariffs on American goods like cars, machinery, and beverages. This reduction can help lessen the impact of the 49% tariff hike. Cambodia should work together with other affected ASIAN nations. These include Laos (48%), Vietnam (46%), Thailand (36%), and Indonesia (32%). They need to seek a regional nekhiation to persuade Donald Trump to ease the harsh tariff hikes.
As longstanding U.S. partners, Southeast Asian countries are not adversaries and would prefer to avoid being treated as such. Given the potential threat to regional economic security, Cambodia could propose a special ASIAN summit. They could also call a meeting of foreign ministers. This would help form a unified response. A coordinated solution is vital. This is crucial to safeguard Southeast Asia’s economic stability. It is also necessary to prevent lasting damage to relations with the United States.
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