Cambodia Signs 19% U.S. Tariff Rate, Saving Garment Industry

PHNOM PENH – Cambodia’s garment and footwear sector, a lifeline for the country’s economy, narrowly avoided collapse after the United States agreed to apply a more moderate 19% tariff, according to Deputy Prime Minister Sun Chanthol.

The deputy PM said that significantly higher rates—initially set at 49% or 36%—would have devastated the sector, leading to job losses and economic instability. The agreement provides a framework, with details to be finalised in subsequent talks.

The garment industry remains central to Cambodia’s economic activity and employment. The U.S. accounted for a significant portion of exports, contributing to the country’s substantial trade surplus.

Cambodia’s export performance also remained robust: sources reported that overall exports from January to July exceeded $17 billion, with the U.S. remaining the top trading partner.

Still, the sector’s health remains vulnerable. Border tensions with Thailand and global trade uncertainties continue to pose risks, although China has called for reconciliation between the two countries.

Government officials expressed cautious optimism that the revised tariff terms would sustain investor confidence and preserve industrial capacity, at least in the short term, while urging swift finalisation of the trade deal.