By Arnaud Darc
Phnom Penh, 8 July 2025
The United States has spoken—bluntly. In a formal letter addressed to Prime Minister Hun Manet on July 7, President Donald Trump announced that Cambodia will face a 36% blanket tariff on all exports to the U.S., effective August 1. Should Cambodia respond in kind, any retaliatory increase will be added on top.
This is not a negotiation. It’s economic coercion wrapped in diplomatic etiquette.
The U.S. president’s letter, like his earlier social media announcement about Vietnam, frames the move as part of a broader campaign for “balanced and fair trade.” But what it reveals is something more unsettling: the end of the multilateral trade order as small countries knew it. Cambodia is not being engaged—Cambodia is being cornered.
Read More: Opinion – Cambodia At A Crossroads: From Crisis Response to Economic Strategy
A Manufactured Crisis
Trump’s argument rests on a trade deficit narrative. He claims the U.S. runs a dangerously high imbalance with Cambodia due to Cambodian tariffs and non-tariff barriers. But this framing is both misleading and dangerous:
– The Cambodian economy is structurally export-reliant and still transitioning from low-income status.
– Cambodia has made repeated gestures to cooperate: cutting tariffs on U.S. goods, inviting U.S. firms, and committing to customs reforms.
– Many U.S. imports from Cambodia are not Cambodian in origin—they’re components from global supply chains.
What Trump is doing is clear: he’s applying the same transshipment logic used against Vietnam and China—penalizing Cambodia not for cheating, but for existing in the gray zones of global trade.
The Leverage Game
The letter also reveals Trump’s preferred tools: tariffs, time pressure, and asymmetric ultimatums. While Vietnam secured a deal that reduced their exposure from a proposed 46% to 20%, Cambodia is offered no such runway. No negotiation table. Just a deadline.
Trump’s proposition: open your markets fully to the U.S. and eliminate all barriers, or pay.
It’s a familiar pattern:
– Use the U.S. consumer market as a weapon.
– Frame any resistance as unfair.
– Offer relief only in exchange for unilateral economic restructuring.
This is not partnership. This is compliance through economic threat.
Cambodia’s Position: Between Power and Principle
This letter arrives as Cambodia is already navigating historic economic stress: supply chain shifts, automation, and post-pandemic recovery have strained the garment and manufacturing sectors. Now, a 36% tariff threatens to devastate factories that depend on U.S. orders for survival.
The broader danger? Strategic dependence. If Cambodia bends to U.S. pressure without securing its own terms, it could be seen as a precedent—an open target for future demands. If it resists, it risks isolation from the world’s largest market.
This is the high-wire act smaller economies must walk in an era where rules are being replaced by raw leverage.
The Way Forward
Cambodia must respond with clarity, not panic:
1. Engage—but do not capitulate. Demand technical negotiations. Insist on timeline extensions. Push for mutual economic assessments, not one-sided narratives.
2. Accelerate its diversification trade relationships. Strengthen ties with ASEAN, the EU, India, and the Global South to reduce dependency on any one actor.
3. Speak regionally. Cambodia is not alone. Japan, Malaysia, Indonesia, Bangladesh, Thailand and others are watching—some quietly absorbing similar pressure. A collective ASEAN front may carry more weight.
One Additional Consideration
While Trump’s approach appears aggressive, it reflects a genuine frustration within U.S. political circles over the ineffectiveness of traditional multilateral trade institutions. Many in Washington view the WTO as slow, legally paralyzed, and ill-equipped to address modern imbalances—especially those involving non-market economies or transshipped goods.
This doesn’t justify the tactics, but understanding the motivation may help Cambodia shape a smarter response: one that acknowledges U.S. pressure points while defending its own economic sovereignty.
Know the Game, Choose Your Moves
The White House letter is not just about tariffs. It’s a warning that in this emerging trade order, might will often mask itself as fairness. Cambodia cannot afford to be naïve—but it also cannot afford to surrender its economic autonomy under the illusion of friendship.
The handshake may be offered with one hand—but the other already holds the knife.
