U.S. tariffs on Cambodia, which were set at 49 percent, have sparked concerns among the Southeast Asian country's key export industries such as garment manufacturing amid the ensuing economic uncertainties.
On April 2, U.S. President Donald Trump announced the 49 percent "reciprocal tariff" on goods imported from Cambodia, the highest among all countries. Days later, the U.S. reduced the so-called "reciprocal tariff" to 10 percent for 90 days, offering a window period to Cambodia for negotiations with it.
Cambodian businesspeople say the tariffs have the potential to wreak havoc on the country's manufacturing sector, which, according to data from the World Bank, makes up around a fifth of the country's GDP.
"For U.S. manufacturers, definitely, there will be a big impact. If manufacturers are focusing on U.S. products, they are now in the middle. They don't know what they should do at the moment because the tariff now from Cambodia to the U.S. is actually quite high," said Dr. Ben Li, a Hong Kong investor in Cambodia and Chairman of the Cambodia Chinese Commerce Association.
Nevertheless, Li sees the tariff hike as an opportunity to export more Cambodian goods to the European Union, where a majority of Cambodian exports enjoy duty-free status.
"I always say there will be a light (at the end of the tunnel.) Even now, the U.S. tariff is so high, it's going to be so high after 90 days, we don't know. But, there's still a big market to Japan or to the European Union. There's still a big opportunity there," he said.
The Cambodian investor also believes the development of major infrastructure projects will help support Cambodia's economy.
"Especially the new canal and then the new airport, and the railways which connect to China. I believe once the logistics and infrastructure are built up, it can help the whole country's economy. By reducing the transportation costs, it can also mitigate the tariff costs," he said.
Cambodia and the U.S. held their first tariff negotiations on April 16, with more expected to follow. Local experts said the stakes are high for the country's workers.
"If this negotiation fails, there will be a significant impact. It will include the garment and travel goods sector. These sectors consist of about 1,068 factories and 930,000 workers. The income generated from these sectors is about 3 billion dollars per year. So it would significantly impact Cambodia's economy, jobs and incomes," said Chey Tech, a socio-economic research and development consultant from Dynamic Alliance Consulting.
Despite the potential risks, Tech expressed his optimism about a positive outcome, citing Cambodian Prime Minister Hun Manat's letter to Trump on April 4.
"The Prime Minister's letter confirmed that Cambodia would reduce the tariff rate for U.S. goods to 5 percent. Second, Cambodia is the least developed country. Third, Cambodia produces goods that the developed countries won't produce. We asked whether the U.S. would be able to produce these low-cost products. It cannot," said Tech.
In 2024, Cambodia exported goods of 9.9 billion dollars to the U.S., making it the country's largest market, accounting for 37 percent of Cambodia's total exports.
49-percent US tariffs sparks worry among Cambodia's key export industries
Chinese Foreign Minister Wang Yi said on Tuesday that mediation efforts of the Pakistani side regarding the Middle East tensions are in the common interests of all parties.
Wang, also a member of the Political Bureau of the Communist Party of China Central Committee, made the remarks in his talks with Pakistani Deputy Prime Minister and Foreign Minister Mohammad Ishaq Dar in Beijing.
During their talks, the two sides exchanged views on current international issues and regional conflicts.
Wang welcomed the visit of the Pakistani side to Beijing for discussion on easing tensions in the Middle East, just after its holding of a quadrilateral foreign ministers' meeting in Islamabad.
He said China supports and looks forward to Pakistan playing a unique and important role in easing the situation and resuming peace talks. This process is no easy task, and Pakistan's mediation efforts are in line with the common interests of all parties, Wang added.
He noted China is willing to make joint efforts with Pakistan to end the hostilities as soon as possible, create opportunities for peace and open the window for peace talks.
On bilateral ties, Wang said this year marks the 75th anniversary of the establishment of diplomatic relations between China and Pakistan, calling on both sides to implement the important consensus reached by the leaders of the two countries and constantly advance the building of a China-Pakistan community with a shared future.
For his part, Dar said the Pakistan-China friendship is precious and deeply rooted in people's hearts, adding that Pakistan is willing to work with China to promote the continuous development of the all-weather strategic cooperative partnership between the two countries.
Dar thanked China for supporting Pakistan's mediation of the situation in Iran, adding that the current conflict has disrupted international energy supplies and caused heavy damage to developing countries.
Noting that solutions can only be found through negotiation, Dar said Pakistan is willing to strengthen communication and coordination with China to push all parties to start peace talks as soon as possible and restore regional peace.
The two sides also put forward a five-point initiative for restoring peace and stability in the Gulf and the Middle East region:
I. Immediate cessation of hostilities: China and Pakistan call for immediate cessation of hostilities and utmost efforts to prevent the conflict from spreading. Humanitarian assistance must be allowed to all war-affected areas.
II. Start of peace talks as soon as possible. Sovereignty, territorial integrity, national independence and security of Iran and the Gulf states should be safeguarded. Dialogue and diplomacy is the only viable option to resolve conflicts. China and Pakistan support the relevant parties in initiating talks, with all parties committing to peaceful resolution of disputes, and refraining from the use or the threat of use of force during peace talks.
III. Security of nonmilitary targets. The principle of protecting civilians in military conflict should be observed. China and Pakistan call on parties to the conflict to immediately stop attacks on civilians and nonmilitary targets, and fully adhere to International Humanitarian Law, and stop attacking important infrastructure, including energy, desalination and power facilities, and peaceful nuclear infrastructure, such as nuclear power plants.
IV. Security of shipping lanes. The Strait of Hormuz, together with its adjacent waters, is an important global shipping route for goods and energy. China and Pakistan call on the parties to protect the security of ships and crew members stranded in the Strait of Hormuz, allow the early and safe passage of civilian and commercial ships, and restore normal passage through the Strait as soon as possible.
V. Primacy of the United Nations Charter. China and Pakistan call for efforts to practice true multilateralism, to jointly strengthen the primacy of the United Nations, and to support the conclusion of an agreement for establishing a comprehensive peace framework and realizing lasting peace based on the purposes and principles of the UN Charter and international law.
Pakistan's mediation efforts in common interests of all parties: Chinese FM
Pakistan's mediation efforts in common interests of all parties: Chinese FM
