Opinion: US Tariffs – Cambodia’s Path To Resilience

David Van

When President Donald Trump announced a staggering 49% tariff on all Cambodian exports to the U.S. in the early hours of April 3 in Asia, the world’s eyes flickered briefly toward this small Southeast Asian nation. The justification? A blistering accusation that Cambodia imposes “97% trade barriers” against American goods. On the surface, it sounded like a David-and-Goliath tale of unfair trade practices. But dig deeper, and the story unravels into something far more revealing—about geopolitics, economic theater, and the quiet resilience of a country caught in the crossfire.

The 97% Myth: A Number Built for Outrage

Let’s start with the headline figure: 97%. To the average American voter, it conjures an image of Cambodia slamming its doors shut to U.S. goods. But in reality, the number is a Frankenstein’s monster of taxes, bureaucracy, and grievances—stitched together for political impact, not accuracy.

• Tariffs: Cambodia’s average tariff on U.S. imports hovers around 10–12% average. As per the World Bank’s World Integrated Trade Solution (WITS) platform, Cambodia’s average applied Most Favored Nation (MFN) tariff (the standard tariff applied to imports from countries without a free trade agreement). The higher rates? They apply largely to luxury items like cars and whiskey—products the majority of Cambodians could never afford.
• Currency Manipulation? An odd claim, given Cambodia’s economy runs on the U.S. dollar. You can’t manipulate a currency you don’t control.
• Red Tape: Yes, Cambodia’s import systems are slow and tangled. But this stems from underfunded infrastructure, not malice. Imagine a rural post office processing Amazon-level traffic—it’s chaos, not conspiracy.

The “97%” isn’t a statistic; it’s a soundbite. It’s meant to feel unfair, not to be fair.

The Real Trade Imbalance: A Story of Proportions

Let’s talk numbers that do matter. The U.S. economy is 540 times larger than Cambodia’s. Americans earn, on average, 27 times more per person. Yet Cambodia spends nearly 18 times more of its GDP per capita buying U.S. goods than Americans spend on Cambodian products.

Picture this:

• A Cambodian earning $3,000 a year spends $23 on American goods.
• An American earning $80,000 a year spends $35 on Cambodian goods.

If trade were a marathon, Cambodia is sprinting while the U.S. is strolling. But in Trump’s narrative, Cambodia is the villain “stealing” jobs.

The Unspoken Target: China’s Shadow

Here’s the open secret: This isn’t about Cambodia. It’s about China.

Since 2018, U.S.-China trade wars pushed Chinese firms to reroute supply chains through smaller nations like Cambodia. Today, 29% of Cambodia’s exports to the U.S. contain Chinese components—think T-shirts stitched in Phnom Penh from Chinese fabric. By slapping tariffs on Cambodia, the U.S. aims to plug a loophole in its battle with Beijing.

Cambodia is collateral damage in a larger war. But why single out a country of 17 million people? Because it’s politically safe. Cambodia lacks the clout to retaliate or the visibility to stir sympathy in U.S. media. When a factory closes in Michigan, it’s easier to blame a faraway “villain” than explain complex global supply chains.

Cambodia’s Path Forward: From Crisis to Catalyst

Retaliation isn’t an option. But neither is surrender. Cambodia’s response must be shrewd, strategic, and rooted in its strengths.

1. Triage the Immediate Pain

Three industries—Textiles/Footwear/Travel Goods, rice and cashews—anchor Cambodia’s exports. These few examples need urgent lifelines:

• Cashew nuts: Ramp up the Smart Cashew Industrial Park in Kampong Thom, a model eco-friendly zone that meets Western sustainability standards as example pilot project.
• Diplomatic Offensive: Flood U.S. media with stories of Cambodian farmers and factory workers—real faces behind the tariffs.

2. Diversify but Smartly

The U.S. market isn’t vanishing overnight, but reliance on it is risky. Cambodia should target:

• Countries with growing demand + U.S. trade fatigue: Canada, Japan, Germany.
• Markets aligned with ASEAN trade deals: South Korea, Australia.
• Niche sectors: Organic rice to Europe, recycled textiles to eco-conscious brands.

A data-driven platform (Trade Intelligence and Negotiation Adviser – TINA) could map these opportunities, identifying which products to reroute and where.

3. Turn Smallness into Strength

Cambodia’s size lets it pivot faster than giants like China or India. By doubling down on sustainability and transparency, it can rebrand as a leader in ethical trade:

• Traceability: “Scan this QR code to meet the Cambodian farmer who grew your cashews.”
• Circular Economy: Pilot zero-waste factories in Kampong Thom, attracting EU partners.

Cambodia didn’t choose this fight. But crises often force reinvention. By leveraging data, diplomacy, and its nimble economy, Cambodia can shift from being a target to a trailblazer—a case study in how small nations thrive in a fractured world.

The tariffs are a storm. But storms don’t last. What matters is what Cambodia builds when the skies clear.

A perspective from the crossroads of trade, truth, and tomorrow’s possibilities.

David VAN
4-4-2025

David Van is a savvy business and policy advisor, with a long experience in regional senior management roles and development sector in Asia, as well as government relations advisory support, blended finance and private-public partnership conceptualization.