Cambodia
A prominent Southeast Asian economist has urged Cambodia not to retaliate against US imports with retaliatory tariffs.
Speaking exclusively to The Khmer Times, Dr Jayant Menon, a senior fellow at the Institute of Southeast Asian Studies (ISEAS-Yusof Ishak Institute) in Singapore and a former lead economist at the Office of the Chief Economist at the Asian Development Bank, said what happened was significant for Cambodia, as it was subject to the highest tariff of 49 per cent.
“This tariff will inevitably affect Cambodia’s exports and ultimately could affect its economic growth. Therefore, it is a major concern for Cambodia’s future development.”
Stressing that Cambodia should not retaliate against reciprocal tariffs on US imports, Jayant explained, “This is because tariffs affect the countries that import those goods more than others, so it may not be good for Cambodia to respond in this way. What needs to be done is to start preparing to diversify its structural base and maintain its trading partners.
When asked about Cambodia’s exit from the Least Developed Countries (LDC) group in 2029 in response to President Trump’s tariffs, he said, “Cambodia’s exit from the LDC group is a separate issue related to structural adjustment and should not be linked to the country’s economic growth outlook.”
He said it would be difficult in the short term to shift its entire export market from the United States to other regions. “Efforts are needed to ensure that export markets are diversified so that there is no over-reliance on the United States market.
The European Union and other regional markets can certainly absorb exports from a small country like Cambodia, but it will take time.
Jayant stressed that ASEAN countries should negotiate with the US as a group. This is very important because it carries more weight. Individual countries should not start negotiations directly with the US, even if they want to. Having a common ASEAN position in talks with the US is a key factor in ensuring the best outcome for all ASEAN members.
“This is also unlikely to be the final phase of Trump’s trade measures. The Trump administration is likely to continue with its tariff policies, and in the coming days and weeks, more details will emerge, and perhaps new policies will be put in place. There is still an opportunity to negotiate a better outcome for Cambodia, but it should be done through the ASEAN group.”
He pointed out that Cambodia would benefit from its high level of dollarization. “A dollarized economy is an advantage in mitigating the impact of these tariffs. Cambodia’s currency for trade is the US dollar, and this provides an opportunity for more clarity for exports and for determining import costs. So dollarization can be an advantage in difficult times like the current one.”
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