The BGA Cambodia team, led by Managing Director Bora Chhay, wrote an update to clients on the development of the trade negotiations between Cambodia and the United States.

Context

  • Cambodia and the United States concluded their first round of trade talks, held from May 13-15, in Washington, D.C. The discussions were led by Deputy Prime Minister Sun Chanthol, Commerce Minister Cham Nimul and staff from various ministries along with Assistant U.S. Trade Representative (USTR) for Southeast Asia and the Pacific Sarah Ellerman. The two sides held frank and constructive talks on trade and investment, discussed a draft agreement and agreed to meet for a second round of negotiations in early June in Washington.
  • Prime Minister Hun Manet characterized the first-round trade talks as an initial exchange of positions and clarification of U.S. tariff measures. He is optimistic that the second round of negotiations will yield substantive outcomes.
     

Significance

  • Cambodia is among the first 20 countries with which the United States engaged in tariff negotiations. Prior to the first round of negotiations, two virtual meetings were held between Chanthol and USTR Jamieson Greer April 16 and May 2. The first followed Prime Minister Hun Manet’s April 4 letter to Trump, expressing interest in trade talks. The second, with Assistant USTR Ellerman, reviewed progress and prepared for the in-person trade and investment framework agreement negotiations.
  • Sun Chanthol and the Cambodian delegation held separate meetings with U.S. Reps. Adrian Smith, Beth Van Duyne and Adam Smith in Washington May 16. The discussions focused on strengthening Cambodia-U.S. relations, promoting trade and investment and marking 75 years of diplomatic ties. Sun Chanthol highlighted Cambodia’s favorable investment climate and recent developments, and his U.S. counterparts expressed strong support for expanding economic cooperation and exploring broader collaboration, including in national defense.

Implications

  • Cambodia seeks to normalize trade relations and reinstate the tariff rates that existed prior to U.S. President Donald Trump’s April 2 announcement. Although tariff negotiations remain complex and uncertain, the first round of talks marked a constructive step toward rebuilding mutual trust and laying the groundwork for a balanced and sustainable trade framework. The June discussions will be framed around addressing tariff barriers and agreeing on a common baseline to guide further negotiations.
  • The USTR on March 31 released its annual report on 59 countries’ trade barriers that impact U.S. companies. The report highlights several trade barriers that could put Cambodia exports at risk of Trump’s tariffs. High tariffs remain a concern, with Cambodia imposing up to 35 percent on U.S. exports, including food, beverages, cosmetics, electronics, electrical appliances and cars. Customs harmonized system code misclassifications create additional costs.

We will continue to keep you updated on developments in Cambodia as they occur. If you have any comments or questions, please contact BGA Cambodia Managing Director Bora Chhay at bchhay@bowergroupasia.com.

Best regards,

BGA Cambodia Team

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Managing Director

Bora leads BGA’s practice in Cambodia. He is a highly regarded government affairs and public policy expert who helps clients resolve business issues, navigate regulatory and legal challenges, expand operations, explore new investment opportunities and enter Cambodia’s market.  Prior to joining BGA, Bora served for five years as a fast-moving consumer goods (FMCG) corporate and regulatory affairs professional. In this role, he helped transform his company’s government relations and corporate affairs unit into a more effective business-driven group. Notwithstanding Cambodia’s difficult and highly regulated macro environment, Bora played a key role in developing and executing government relations and corporate affairs ... Read More