Cambodian economists and government officials are optimistic that the 36% reciprocal tariffs previously imposed by the US on Cambodian goods could be reduced following last night’s ceasefire agreement between the Cambodian and Thai governments. The agreement to end hostilities was in response to an appeal by US President Donald Trump.
After a large-scale five-day conflict erupted on the morning of July 24, the Cambodian and Thai governments reached a formal ceasefire on the night of July 28.
Prior to the agreement, Trump had personally phoned the leaders of both governments, urging an immediate end to the conflict. He warned that failure to comply could result in increased reciprocal tariffs rates at a time when both countries are negotiating with the US to reduce their respective tariffs.
Casey Barnett, president of the American Chamber of Commerce in Cambodia, took to social media to laud the US involvement in the ceasefire.
“Thank you President Trump for your timely and forceful demand that brought a Cambodia-Thailand ceasefire within 45 1/2 hours of your personal intervention. There is now hope for 300,000 refugees and millions more whose livelihoods were threatened by the rapidly escalating border war.
“President Trump asked for a ceasefire at 3.30pm, July 26 EST (2.30am, July 27 Cambodia time), the prime ministers of Cambodia and Thailand met the next day, and an unconditional ceasefire was announced for 1.00pm, July 28 (midnight Cambodia time), 45.5 hours later. Weeks of offers of mediation from China and an appeal to the United Nations resulted in only tepid statements requesting deescalation.
“Now, with the ceasefire, bold steps must be taken to ease tension that could easily erupt into renewed fighting. In the spirit of President Trump’s offer of trade for peace, it is hoped that Cambodia and Thailand enable deescalation by restoring their people’s livelihoods through unconditional normalisation of cross border trade,” he wrote.
Lor Vichet, vice-president of the Cambodia-China Commerce Association, viewed the ceasefire agreement as a positive step towards peace for both Cambodia and Thailand. He added that it could create a favourable environment for the US to reduce tariffs on Cambodian goods below the current 36%, with the new rate set to take effect on August 1.
“I am optimistic that through the Cambodian government’s efforts to end the war with Thailand, many positive outcomes will arise for our people, including recognition from the US through lowered tariffs,” he said.
Sun Chanthol, chairman of the Working Group on Cambodia-US Bilateral Trade and Investment Relations, also expressed optimism that the tariff rate imposed by the US on Cambodian goods will fall below the previously announced threshold.
Speaking to reporters during a site inspection and border demarcation event for the proposed Funan Techo Canal project in Kep province on July 25, Chanthol claimed that the working group has made significant efforts to ensure the Kingdom’s products remain competitive and retain strong market access in the US.
He added that the Cambodian side has formally requested that the US apply a competitive tariff rate — comparable to those offered to neighbouring and competing countries that export similar goods to the US.
Chanthol explained that all relevant documents regarding the request were submitted to the US at 11.30pm on July 16. The US has since held internal discussions and submitted a report to President Donald Trump.
Cambodia is hopeful for a better outcome compared to the previous round of negotiations, where the US government reduced tariffs on Cambodian goods from an initial 49% (announced on April 2) to 36%.
“We hope that by next week, we will receive a response from the US regarding a finalised tariff rate,” he said.
According to Chanthol, the US is expected to announce the new tariff rate sometime next week (before August 1), and it is expected to be lower than 36%.
On July 7, US President Trump sent a letter to Cambodian Prime Minister Hun Manet, confirming a tariff reduction from 49% to 36% on Cambodian imports, effective August 1. This followed several virtual and two in-person rounds of negotiations between Cambodian and US trade officials.
On April 2, the US government announced sweeping import tariff increases on nearly all countries worldwide, effective from April 9. However, Trump granted a 90-day delay to allow for bilateral negotiations.
