PHNOM PENH (Xinhua): The overall impact of the current US tariff imposed on Cambodian products will be negligible, but further tariff escalation would disrupt the labour market in the Southeast Asian country, according to a policy brief by the Asian Development Bank (ADB).
"Economic modelling confirms that the current tariff is indeed manageable, while demonstrating that a higher tariff would have dire consequences for Cambodian families through unemployment and poverty," Milan Thomas, ADB country economist for Cambodia and lead author of the brief, said in a news release.
On Aug 1, the US imposed a 19-per cent tariff on all goods imported from Cambodia.
"The high tariff would slow economic growth by nearly 1 percentage point, push over 100,000 people into unemployment, and increase the poverty rate by over 1 percentage point, reversing some of the recent progress in poverty reduction," the policy brief said.
"The impact would be especially severe for workers in the garment and electronics sectors, who would likely move into lower-paying sectors like agriculture and basic services," it added.
The brief recommended that, in the event of tariff escalation, temporary relief measures, including social transfers, employment services, and training programmes, may need to be strengthened to ease labor market transitions and protect vulnerable populations.
"In the longer term, ongoing investments in economic competitiveness through infrastructure, human capital, and business reforms will build Cambodia's resilience to future shocks," the brief said. - Xinhua
