The Cambodian government has taken swift and strategic action to defuse a potential trade crisis with the United States.
On April 4, 2025, Cambodia officially announced a significant cut in import tariffs on 19 categories of U.S. products — slashing rates from a maximum of 35% down to just 5%.
This move is seen as a strong signal that Phnom Penh prefers diplomatic engagement over confrontation in response to Washington's new tariff measures.
Responding to the U.S. 49% Tariff Threat
Cambodia’s tariff reduction comes as a direct response to the U.S. announcement of a steep import tariff up to 49% on key Cambodian exports, including footwear and textiles.
The measure, set to take effect on April 9, has sparked concerns across Cambodia’s manufacturing sector, which employs millions of workers and serves as a major export engine to the U.S.
The footwear and garment industries are especially vulnerable. Many companies in these sectors supply leading American brands, and the new tariffs could lead to contract cancellations, production cutbacks, and even mass layoffs.
According to Bao Hai Duong, the Cambodian government acted swiftly to implement the tariff reduction as a way to reopen diplomatic channels and stabilize trade relations with Washington.
Also read: The Impact of the New U.S. Tariffs on ASEAN Countries: Challenges and Strategic Responses
Hun Manet’s Economic Diplomacy
In an official letter addressed to U.S. President Donald Trump, Cambodian Prime Minister Hun Manet requested a delay in the implementation of the new tariffs and proposed the opening of bilateral trade negotiations.
Citing Lao Dong News, the letter, sent on April 4, 2025, emphasized Cambodia’s willingness to engage constructively through diplomatic means.
Meanwhile, as reported by Khmer Times, Cambodian Minister of Commerce Cham Nimul also called for the establishment of a joint trade consultation mechanism between the two nations.
She stated that the tariff cut underscores Cambodia’s commitment to fair trade and the long-term sustainability of its economic partnership with the United States.
Also read: Asia Under Fire: How Trump's Trade Tariffs Hit Southeast Asian Economies
A Small Nation’s Smart Defense Strategy
Observers have praised Cambodia’s move as a smart and preventive strategy. Amid rising global uncertainty, smaller economies like Cambodia face heightened vulnerability.
Instead of retaliating with countermeasures, Phnom Penh chose dialogue as a means to safeguard export continuity and domestic economic stability.
According to Kiripost, the Cambodian government believes that diplomacy is key to protecting millions of workers in the export sector from the fallout of U.S. trade actions.
The decision also reflects Cambodia’s desire to remain an active player in the global rules-based trading system.
Also read: ASEAN Solidarity: 7 Powerful Ways Southeast Asia Stands United Against Global Crises
Regional Implications for ASEAN
Cambodia’s decision has raised a broader regional question: is this the beginning of a new wave of Trump-style protectionism? Other ASEAN countries like Vietnam and Indonesia are closely watching the situation, given their similar export profiles.
If the U.S. tariffs set a precedent, Southeast Asian nations may be forced to rethink their trade strategies — including market diversification and strengthening intra-ASEAN trade ties.
Phnom Penh’s Peace Offering – Will Washington Accept?
Amid geopolitical tensions and the resurgence of U.S. protectionist rhetoric, Cambodia is showing that diplomacy remains its most effective weapon.
By unilaterally reducing import tariffs, Phnom Penh seeks to balance national interests with the need to maintain healthy international relations.
Now, the ball is in Washington’s court: will the U.S. accept this olive branch, or continue on a path of hardline trade policy?
