Introduction
Trade relations between Cambodia and the United States have long been shaped by economic policies, trade agreements, and market demand. However, the recent decision by the U.S. government to increase import tariffs on Cambodian products has raised concerns about potential ripple effects on Cambodia’s overall trade with the U.S.
One key question that arises is whether these heightened tariffs will influence Cambodia’s import of automobiles from the United States. To answer this, we need to examine:
+ The details of the tariff policy and its intent.
+ The structure of Cambodia-U.S. trade relations.
+ The potential economic impact on car imports from the U.S.
+ Possible responses from the Cambodian government or businesses.
Understanding the New U.S. Tariffs on Cambodian Products (Car Imports)
The U.S. administration announced a significant shift in its trade policy in April 2025, imposing higher tariffs on products imported from countries that have a trade surplus with the U.S. Cambodia was among the hardest-hit countries, facing an import tariff rate of 49% on its exports to the U.S.
Reasons Behind the U.S. Tariff Increase
The U.S. government cited the following reasons for the tariff hike:
+ Trade Deficit Reduction: The U.S. has been running a substantial trade deficit with Cambodia. In 2024, Cambodia exported over $8.23 billion worth of goods to the U.S., while U.S. exports to Cambodia were only $217 million. This imbalance led U.S. policymakers to impose tariffs aimed at reducing the trade deficit.
+ Domestic Economic Protection: The tariffs are designed to encourage more domestic production in the U.S. and reduce dependence on imports.
+ Geopolitical Considerations: Some analysts believe that the U.S. is using trade policies to exert pressure on Cambodia’s government, given concerns over Cambodia’s growing ties with China.
What Products Are Affected?
The tariff hike applies mainly to garments, footwear, bicycles, travel goods, and agricultural products, which are Cambodia’s key exports to the U.S. The increase in tariffs means that Cambodian manufacturers will face higher costs when exporting to the U.S., potentially reducing demand.
Cambodia’s Trade with the U.S.: A Closer Look
Cambodia’s Exports to the U.S.
The U.S. is one of Cambodia’s largest export markets. In 2024:
+ Garments, footwear, and travel goods accounted for more than 60% of Cambodia’s exports to the U.S.
+ Bicycles and agricultural products made up a significant portion of the remaining exports.
U.S. Exports to Cambodia
On the other hand, U.S. exports to Cambodia include:
+ Automobiles and auto parts
+ Machinery and electronic equipment
+ Medical equipment
While automobile exports are a relatively small part of total U.S. exports to Cambodia, they remain important, particularly for dealers who import used American cars.
Will the U.S. Tariff Increase Affect Car Imports to Cambodia?
The short answer is not directly, but there could be indirect effects.
No Direct Impact on Car Imports
The U.S. tariffs apply only to Cambodian products entering the U.S. and do not directly increase the cost of U.S. car exports to Cambodia. Cambodia still applies its standard import duties and taxes on imported vehicles, which remain unchanged unless the government decides otherwise.
Potential Indirect Effects on Car Imports from the U.S.
Even though there is no direct increase in costs for American cars coming into Cambodia, the overall impact of the tariffs could indirectly influence the car import market in several ways:
Weaker Cambodian Economy Could Lower Car Demand
Cambodia’s economy relies heavily on its export sector. If Cambodian exports to the U.S. decline due to the high tariffs, manufacturers might cut jobs or reduce wages, leading to lower purchasing power for consumers.
If Cambodian businesses suffer from decreased exports, fewer people may be able to afford imported vehicles, including American cars.
Cambodia Could Seek Alternative Suppliers
While American cars are known for their durability and affordability in the used car market, they face strong competition from Japanese, Korean, and Chinese brands.
If economic conditions in Cambodia deteriorate due to the tariff increase, dealers may shift toward more cost-effective imports from Japan or Korea rather than the U.S.
Possible Currency Fluctuations Could Make U.S. Cars More Expensive
Trade disruptions can affect exchange rates. If the Cambodian riel or U.S. dollar exchange rate fluctuates unfavorably, it could make U.S. cars more expensive compared to competitors.
Retaliatory Measures by Cambodia?
Historically, Cambodia has not engaged in retaliatory tariff measures. However, if the U.S. tariffs significantly impact the Cambodian economy, the government could consider policy changes that make U.S. imports, including cars, less attractive.
Cambodia might also seek trade agreements with other partners to diversify its sources of imported vehicles.
Market Trends for American Cars in Cambodia
Cambodia has a growing demand for vehicles, particularly used cars. Many Cambodian buyers prefer:
+ Toyota (including U.S. imports of Toyota Highlander, Camry, and RAV4 models)
+ Ford and Chevrolet, which are directly imported from the U.S.
+ Luxury American brands like Cadillac and Lincoln, though in smaller numbers
If tariffs weaken Cambodia’s economy, there may be a slowdown in car purchases, with buyers opting for cheaper alternatives from Japan or Korea rather than American imports.
Cambodia’s Response and Future Trade Outlook
The Cambodian government has expressed concerns over the new U.S. tariffs. However, it has also emphasized the importance of maintaining strong trade ties with the U.S.
What Could Cambodia Do?
Negotiate Trade Preferences: Cambodia may seek negotiations with the U.S. to secure preferential trade terms, especially if the tariffs hurt industries significantly.
Strengthen Ties with Other Markets: Cambodia could pivot more toward trade with China, the EU, or ASEAN nations to offset losses from U.S. trade barriers.
Encourage Domestic Car Assembly: If U.S. car imports decline, Cambodia might explore options to assemble vehicles locally, attracting investment in automotive manufacturing.
Global Trade Shift: A Challenge for U.S. Auto Exports?
The U.S. has been imposing more tariffs on various countries, which could lead to shifts in global trade patterns. If U.S. cars become less competitive due to international trade tensions, Cambodian importers might look elsewhere for better deals.
Conclusion
While the U.S. tariff increase on Cambodian products does not directly raise the cost of American car imports into Cambodia, it could have indirect consequences. A weaker Cambodian economy, shifting trade relationships, and changing consumer preferences could reduce the demand for U.S. cars in Cambodia over time.
Cambodian dealers may explore more affordable options from Japan or Korea if the economic conditions become less favorable. The future of U.S. car imports to Cambodia will depend on how both governments navigate their trade relationship in the coming months.
References:
Financial Times
Khmer Times
Phnom Penh Post
Vietstock
