US Trade Deal with Cambodia 8-1-25

Cambodia's economy is highly reliant on trade, particularly with the US, which serves as its largest export market. 

However, Cambodia has also been making strides in AI development and is working to integrate AI into various sectors of its economy, according to LinkedIn and Law Gratis. Here's an overview of the situation: 

Trade relationship

In 2024, US goods imports from Cambodia totaled $12.7 billion, making it a crucial trade partner for Cambodia.

Cambodia's reliance on the US market exposes it to trade policy shifts, as evidenced by concerns regarding potential tariffs on Cambodian goods, says AInvest.

The garment and footwear sector is particularly vulnerable to shifts in US trade policy, as it accounts for over 80% of Cambodian exports to the US, notes AInvest.

Cambodia is actively participating in regional trade agreements like the ASEAN Free Trade Area (AFTA) and the Regional Comprehensive Economic Partnership (RCEP) to diversify its export markets and reduce reliance on a single partner, according to the Khmer Times. 

AI outlook

Cambodia is prioritizing AI development and digital transformation as key drivers of socioeconomic progress.

The Cambodian government's "Cambodia Digital Economy and Society Policy Framework 2021–2035" and "Cambodia ICT Master Plan 2020" emphasize AI's role in sectors like governance, education, healthcare, agriculture, and financial services.

Cambodia is actively collaborating with international organizations like UNESCO and the Asian Development Bank (ADB) to build digital capacity and promote ethical AI development.

While Cambodia is developing a National AI Strategy and engaging in regional AI governance initiatives like the ASEAN Guide on AI Governance and Ethics, it currently lacks specific AI laws and is taking a cautious, principle-based approach to regulation, according to Kiripost. 

Potential AI impact on trade

AI has the potential to enhance Cambodia's competitiveness in the global market by improving productivity and efficiency in various industries, particularly in manufacturing and agriculture.

AI could also help Cambodia diversify its exports beyond the garment sector and move up the global value chain.

Investing in AI infrastructure and education can attract foreign direct investment and create new trade opportunities. 

However, challenges remain for Cambodia to fully harness AI for trade and development, including limited skilled labor, inadequate infrastructure, and the need for stronger regulatory frameworks. Addressing these issues will be crucial for Cambodia to leverage AI as a tool for sustainable economic growth and reduced reliance on a single trade partner. 

Cambodia has been actively seeking to establish and strengthen trade ties with the United States, particularly as the US is their largest export market. Recently, US Commerce Secretary Howard Lutnick announced that the United States had reached trade agreements with Cambodia and Thailand, following a ceasefire agreement between the two Southeast Asian nations brokered by President Trump. However, details regarding these deals, including specific tariff rates, were not immediately available and officials

https://www.google.com/search?q=us+trade+deal+with+cambodia

In early August 2025, Cambodia and the United States have reached a trade agreement reducing US tariffs on Cambodian goods and seeing Cambodia eliminate tariffs on US imports. Here's a breakdown of the situation:

·       Reduced Tariffs: The US has reduced its tariffs on Cambodian goods from an initially high 49% to 19%. Cambodia, in turn, has eliminated tariffs on all US imports.

·       Context of the Agreement: This agreement follows a period of heightened tensions surrounding the potential for higher US tariffs on Cambodian goods and amidst a border conflict between Cambodia and Thailand. US pressure was a factor in securing a ceasefire between Cambodia and Thailand, and a condition for continuing trade negotiations.

·       Cambodian Concessions: Beyond tariff elimination, Cambodia has also committed to purchasing 10 Boeing 737 Max 8 aircraft with an option for 10 more, and to cracking down on the illegal transshipment of Chinese goods through Cambodia to evade US tariffs.

·       AI and Cambodia's Economic Outlook: Cambodia is actively exploring the potential of Artificial Intelligence (AI) as a catalyst for economic diversification. The Cambodian government aims to leverage AI in key sectors like agriculture, logistics, and education to improve efficiency and drive economic growth. This aligns with Cambodia's broader goals for development and may impact future trade relations as AI-driven solutions are implemented. 

https://www.google.com/search?q=cambodia+trade+deal+with+us+august+1+2025

Cambodia's nominal GDP in 2025 is projected to be $49.8 billion USD. Cambodia's nominal GDP per capita for 2025 is projected to be $2,869.65. The population of Cambodia in 2025 is estimated to be around 17.8 million.

AI Overview

In 2025, Cambodia's key trading partners include the United States, China, Vietnam, Thailand, and Japan. These countries are crucial for Cambodia's export market, with garments, footwear, and agricultural products being major exports. Trade agreements, like the ASEAN Free Trade Area (AFTA), and bilateral agreements with China and the U.S. facilitate these trade flows. 

n the first five months of 2025, Cambodia's trade with the United States reached $5.22 billion, a 14.95% increase compared to the same period last year. U.S. exports to Cambodia rose by 9.56%, while imports from Cambodia increased by 15.1%. This resulted in a U.S. trade deficit with Cambodia of $4.95 billion. 

https://www.google.com/search?q=cambodia+trade+balance+with+us+2025

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