Trump's tariffs are a major blow to Cambodia's economy, especially in the garment sector.

Cambodia

US President Donald Trump’s sweeping tariffs targeting much of the world are now in effect, and apart from China, no other region has been hit as hard as Southeast Asia.

Near the top of the list are Vietnam and Cambodia, which have been hit with some of the highest tariffs: 46% and 49%. Thailand (36%), Indonesia (32%) and Malaysia (24%) are also hit. The Philippines get 17% and Singapore 10%.

This is a major blow to a region that relies heavily on exports. Its widely praised economic development over the past three decades has been largely driven by its success in selling its products to the world, especially the United States.

Exports to the United States account for about 30% of Vietnam’s GDP and 25% of Cambodia’s gross domestic product.

That growth is now being stymied by sanctions imposed in Washington.

The long-term impact of these tariffs, assuming they remain in place, will vary, but will certainly pose major challenges to the governments of Vietnam, Thailand, and Cambodia in particular.

For Cambodia, the tax is perhaps the most serious political threat in the region. Hun Manet’s government is as authoritarian as his father, Hun Sen, who took power two years ago, but it is vulnerable.

The Hun family’s continued rule has required economic concessions to rival clans in Cambodia, such as monopolies or land concessions, but this has helped create a gloom of unsold real estate developments and widespread outrage over land expropriations.

The garment sector, which employs 750,000 people, is a vital social safety net, providing a steady income for Cambodia’s poorest. Thousands of those jobs are now likely to be lost because of President Trump’s tariffs.

Unlike China, which has hit back with its own tariffs, the official message from governments in Southeast Asia is not to panic, not to retaliate, but to negotiate.

Vietnam has sent Deputy Prime Minister Ho Duc Phoc to Washington to plead his country’s case and has asked for the elimination of all tariffs on U.S. imports. Thailand plans to send its finance minister to make a similar appeal and has asked for tariff cuts and to buy more American products, such as food and aircraft.

However, the Trump administration seems in no mood to compromise.

The Cambodian government has called on the United States to hold off on raising tariffs while it tries to negotiate.

The local American Chamber of Commerce has called for a 49% tariff that would hit Cambodia’s garment industry, the country’s largest employer, hard, but no higher tariff would see clothing and footwear production return to the United States.

Perhaps the most infuriating tariff rate is the 44% that would apply to Myanmar, a country embroiled in civil war that can no longer afford to buy more U.S. goods.

U.S. exports account for only a small proportion of Myanmar’s GDP, less than 1%. But as in Cambodia, the sector, which is dominated by the garment industry, is one of the few that provides a steady income for poor families in Myanmar’s cities.

In a twist of irony, Trump has so far been a popular figure in the region.

He is widely admired in Vietnam for his tough, operational approach to foreign policy, and Cambodia’s former strongman, Hun Sen, who remains a power behind the scenes, has long sought a close personal relationship with the US president, proudly posting a selfie with him at their first meeting in 2017.
Last month, Cambodia praised Trump for shutting down US media outlets Voice of America and Radio Free Europe, which have often aired views that are hostile to Cambodia.

Now, Cambodia, like many of its neighbours, finds itself in a long line of beggars begging him to ease their tax burdens.