Clothing factory in Phnom Penh, Cambodia.
Bloomberg Bloomberg Getty images
Among the most important goals for the president Donald Trump and his administration in the fight against trade partners steep tariffs Restores the production capacity to the USA, even if it is a price Short -term market and economic coercion. But in Cambodia the Asian country hit the highest tariff indicator in the new commercial plan, this goal is very unlikely.
While the 49% tariff rate, which Trump's administration imposes on Cambodian goods, will lead to an existential crisis for Cambodian factories and employees at a low level of global income distribution, according to a commercial group, which represents American interests in the retail industry.
“They will absolutely not return to the United States,” said Casey Barnett, president of the American Chamber of Commerce in Cambodia, a commercial association representing American production companies in Cambodia. “I can't imagine that Americans want to sit and sew a pair of tracksuits for long hours,” said Barnett.
Barnett said that producers in Cambodia look at other countries to alleviate the tariffs, but the US is not an option. Some companies want to transfer their supply chains to Egypt, Sub -Saharan Africa, India and Indonesia. Other companies move more slowly, thinking that the tariffs can be reversed.
According to Barnett, the factories in Cambodia are in no way in a good position, looking for ways to survive for the next few months.
“The labor-intensive work of clothing factories here in Cambodia simply cannot still operate with 49% additional tariff. They cannot survive and look for alternatives,” he said.
At least, at least no new orders are placed. “There are orders. Orders stop. Everyone is dealing with uncertainty and wants to wait a bit to see how dust is told,” added Barnett.
The Cambodia government is working on a number of steps to relieve pressure, such as fiscal policy, including tax breaks.
Under Armor, Rawlings Sporting Goods, Lulummon, Black & Decker, Hugo Boss, Hearth & Home, Eddie Bauer, Dollar General, Diagueo, Asics, Adidas and Bass Pro Shops belong to retail companies that import from Cambodia to North America. There are more and more fierce lists of items imported from clothing for footwear, travel goods, bicycles, agricultural products, furniture, solar panels, tires and kitchen cabinets.
Expect a break in making executive decisions
Andrei Quinn-Barabanov, running a supply chain in Moody's in the industry, claims that even if companies produce as cheap as possible, the transfer of supply chains is a large investment.
“Investments in the supply chain are to be long -term, and when you have such a huge uncertainty, it is unlikely to make these decisions. Companies will wait to see what the reaction to the tariff from other countries will be, as well as non -thread -free restrictions that will impose on American companies. You will have very few executive decisions.”
The White House said that the Cambodia tariffs on the USA reach up to 97%, a claim questioned by the country, as well as by many sources of tariff data, including the World Trade Organization. The Economic Complex Observatory, which also studies commercial data, says that some consumer products, such as snacks, cosmetics and cars, can see much higher tariffs than the average, up to 35%, in Cambodia. The average American tariff for Cambodian goods is 2.6%.
The administration still argued that the return of production to the US will ultimately lead to greater income for the US, “if we put a tariff wall, the ultimate goal would be to restore jobs back to the USA, but in the meantime we will collect significant tariffs” Treasury secretary Scott Bessent said on CNBC on Tuesday. “If we succeed, the tariffs would be in a sense melting the cube of ice because you accept revenues, because production plants are built in the USA and there should be a certain level of symmetry between taxes, which we begin to accept with a new industry from pay taxes with a decrease in tariffs.”
Andre C. Winters, founder and director of the advisory and planning company Hudsonwinters, CNBC recently said It is doubtful that companies will bring production to the US in a hurry. “This trade war is not an incentive to return to the United States,” said Winters. “Companies will look at other countries that are hit by lower tariffs. If I pay 40% in Vietnam and I can get a 20% tariff in another country, I will go there because it is finally cheaper than returning to America.”
Barnett said that the American consumer will be at least part of the invoice, like Many companies have warned.
“Unfortunately, he will raise the prices of the American consumer,” he said. “Cambodia helps American families in buying these clothes at an affordable price. These tariffs will simply raise prices for American families and not bring production back to the USA”
Restoring production to the United States is Not the only reason for the Trump tariff planAccording to President Trump and his commercial advisers, reducing the nation's deficit and commercial debt and enabling tax reductions, also critical for their strategy, and it became clear, because the nations are beginning to offer tariff concessions.
Prime Minister Cambodia He sent a letter to Trump's administration In recent days, he presents a significant reduction in tariff rates for American goods. Vietnam suggested that he would take a tariff for US imports up to 0%, which Trump noticed, but later that Trump's administration is not enough for the administration to raise new fees.
Trade deficits and “Nontoniff fraud” are equally important, said the White House trade advisor Peter Navarro on Monday in the CNBC interview, rejecting the establishment of the Vietnamese offer.
Compared to commercial deficits, Cambodia is low on the list compared to many international production nations. In 2024, the trade in American goods with Cambodia was around $ 13 billion According to the office of a US trade representative. The export of American goods to Cambodia in 2024 amounted to USD 321.6 million, which is an increase of $ 4.9% (USD 14.9 million) from 2023. American goods imported from Cambodia amounted to USD 12.7 billion in 2024, up by 9.3% (USD 1.1 billion) from $ 1,1 billion in the amount of 1023.
The largest trading deficits with us, according to the nation
(for billions of dollars, from December 2024)
- China (-295.4)
- Mexico (-171.8)
- Vietnam (-123.5)
- Ireland (-86.7)
- Germany (-84.8)
- Taiwan (-73.9)
- Japan (-68.5)
- Korea, South (-66)
- Canada (-63.3)
- India (-45.7)
Source: US census Bureau
Trump's advisers used this term “Sharing loads” Discuss the wider philosophy of aggressive tariffs and arguing that other countries will bear the costs of tariffs. Many economists pointed to the risks related Hitting one of the poorest nations in the world with high tariffs. Cambodia is one of 11 nations that take into account a small part of the US trading deficit, but exports to the USA constituting over 10% of their GDP, in accordance with the Global Development Center. “For people working in the clothing industry, the conditions are harsh, but the wages offered by these works are a real opportunity, especially for women,” he noted.
According to Gilberto Garcia-Vazquez, the chief economist in the Datawheel research company, worth over $ 1 billion from Cambodia, which the US has already brought from Cambodia, means an increase of 22.5%by 22.5%. “This growth emphasizes the deepening Cambodia dependence on American consumers, who now include over a third of total exports in the country,” he said. “New 49% of tariffs imposed by Trump's administration can remove $ 4.56 billion for Cambodia export over the next four years, and travel clothing and goods suffer from the biggest blows.”
According to Datawheel, according to the example, knitted sweaters can lose $ 548 million, being a significant risk for the Cambodia clothing industry, its workforce and general economic stability.
Barnett repeated these fears, saying that tariff indicators would increase poverty in Cambodia, lead to losing jobs and would expand the commercial deficit even more.
“There is a bit of panic and it is tragic, because there are 1 million poorest people in the world in Cambodia, and many of them are women who are trying to meet. Their monthly salary is about USD 300,” said Barnett. “Cambodia is located between a rock and a difficult place.”