The Asian Development Bank welcomes Cambodia's response to US tariffs

The Asian Development Bank (ADB) has congratulated Cambodia for its considered and strategic response to the recent imposition of 49% tariffs on Cambodian goods by the United States.

Jyotsana Varma, ADB Country Director for Cambodia, praised Prime Minister Hun Manet's diplomatic approach, particularly his initiative to negotiate tariff reductions with the United States, an initiative that encourages mutual understanding between the two countries.

In the context of these negotiations, Cambodia has proposed to reduce tariffs from 35% to 5% on 19 tariff lines, which demonstrates a calm and constructive attitude in the face of economic uncertainties.

Varma emphasised that while the full impact of tariffs remains uncertain, Cambodia's resilience and the government's efforts to diversify export markets and improve productivity are key to mitigating the negative effects. The government's measured response aims to avoid panic and maintain economic stability, supported by ongoing free trade agreements and the exploration of ASEAN markets.

The ADB also emphasised its commitment to supporting Cambodia through investments in human capital development, digital infrastructure and clean energy, which are essential to support long-term growth and economic diversification.

The tariffs announced by former US President Donald Trump pose significant challenges, particularly to the Cambodian textile sector, which is heavily dependent on the US market. However, the ADB has noted potential growth opportunities in other markets such as the EU, Canada and the United Kingdom. Despite the increase in customs duties, the Cambodian economy is expected to continue to grow, despite increased uncertainty in trade policy.

The ADB remains confident in Cambodia's ability to adapt and maintain growth through strategic policy measures and international cooperation.

In summary, the ADB considers Cambodia's diplomatic and economic response to US tariffs to be mature and pragmatic, highlighting the country's resilience and the importance of continued support and diversification to navigate this challenging trade environment.