Policy Briefs  

Economic Impacts of the United States Tariff on Cambodia


Published: 11-Nov-2025
Keyword: US import tariffs, Cambodia exports, value-added ratio, garment sector, economic impact

Abstract/Summary

Due to the April 2025 announcement of new, country-specific United States (US) import tariffs, bilateral trade relationships with the US have taken center stage in developing countries, especially small, export-oriented economies like Cambodia. Exports to the US are about 33% of total Cambodian exports and worth 25% of gross domestic product (GDP) in a typical year (Figure 1). Cambodia imports heavily the raw materials and energy required to produce its exports, so a relatively low share of exports are value-added to the Cambodian economy. While there is no comprehensive estimate of Cambodian value-added for key export products, a case study of the garment sector (which accounts for about half of Cambodian exports to the US [Figure 2]) suggests that roughly 25% of garment sector exports are domestic value-added, largely through labor.

If other exporting sectors have a similar value-added ratio, this implies that 6% of Cambodian GDP could be at risk due to the US tariff. This may be considered the upper limit of the predicted impact of the high US tariff (36%) on Cambodia’s economy, as it gives a simplistic estimate of the loss if the US market disappeared and Cambodia had no way to divert production to other destinations.

Access the full paper: http://dx.doi.org/10.22617/BRF250433




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