PHNOM PENH (Bernama): Cambodia could gain a competitive edge under the latest United States (US) 10 per cent tariff announced Thursday, which is lower than the levies imposed on regional manufacturing rivals.
The Office of the United States Trade Representative (USTR) announced a fresh round of tariffs ranging from 10 to 12.5 per cent on imports from 60 countries for employing forced labour in the production of export goods.
"This new tariff of 10 per cent is good for Cambodia in terms of competitiveness and attracting FDI (foreign direct investment). The garment, footwear, and travel goods sector will benefit because its close competitors in the region like Vietnam and China face a 12.5 per cent tariff.
"The non-garment manufacturing sector, other product and goods sectors could also benefit because our regional competitors like Thailand and Vietnam are already facing higher tariffs of 12.5 per cent,” Phnom Penh-based independent economist Dr Chey Tech told Bernama.
However, Cambodia will continue to compete with Bangladesh and Indonesia, which are also subject to the same 10 per cent US tariff. These countries rely on local raw materials such as cotton and fabric which Cambodia heavily imports from China, he said.
The US Trade Representative Jamieson Greer, in a press statement dated July 23, said the tariffs were imposed under Section 301 of the Trade Act of 1974 because the affected countries had failed to effectively prohibit imports produced with forced labour, according to USTR’s website.
The US remains one of Cambodia's largest export markets. Bilateral trade reached US$13 billion (RM53 billion) last year, state media Agence Kampuchea Presse reported, citing the Commerce Ministry.
The kingdom’s main exports to the US include apparel, travel goods, footwear, clothing accessories, electrical machinery, leather products, and handbags.
The new tariff regime comes as Cambodia faces slower economic growth. On July 8, the International Monetary Fund lowered the kingdom's 2026 growth forecast to 3.0 per cent.
"The lower tariff is good news for Cambodia's exports and economic development.
"However, Cambodia needs to restructure its economy, accelerate digitalisation, develop a more skilled workforce, reduce bureaucracy, and diversify its industrial base to attract more foreign investment," said Chey.
-- BERNAMA
