Logo of Phnom Penh Post newspaper Phnom Penh Post - Cambodia could skirt fallout of ‘trade war’

Cambodia could skirt fallout of ‘trade war’

US President Donald Trump speaks during a meeting with senior military leaders at the White House in Washington, DC in April. Regional economies are preparing for potential damage from mounting US protectionism. AFP
US President Donald Trump speaks during a meeting with senior military leaders at the White House in Washington, DC in April. Regional economies are preparing for potential damage from mounting US protectionism. AFP

Cambodia could skirt fallout of ‘trade war’

Even as regional economies brace for potential damage from mounting US protectionism, Cambodia is projected to see a small boost to its GDP growth thanks to US tax reforms, Cambodian delegates to a regional economic meeting said on Friday.

The 21st Asean+3 Finance Ministers’ and Central Bank Governors’ Meeting, held at the Asian Development Bank’s (ADB) annual meeting in Manila, discussed global and regional economic challenges, including fears of a US-led “trade war”, according to participants.

Cambodian Finance Ministry Secretary of State Vongsey Vissoth, who attended the meeting alongside National Bank of Cambodia Governor Chea Chanto, said the meeting raised concerns around the US’s rising protectionist rhetoric, which precipitated in tense negotiations between officials of the US and China in Beijing last week.

“The protectionism of the US is a trade war. It will cause a huge impact to Asean+3 as the majority of countries conduct big trade with the US,” Vissoth said.

“It could impact financial stability in the region,” he said, adding that Asean+3 was looking for strategies to mitigate the risks.

Beyond imposing tariffs and other barriers to trade – the US raised tariffs on steel and aluminium imports in March – US tax reforms are encouraging American corporations to repatriate profits, altering global capital flows.

Nevertheless, the International Monetary Fund (IMF) assessed Cambodia as being likely to be spared the initial damage from any trade war, at least in its first round, Vissoth said.

The US market accounts for 22 percent of Cambodian exports, 80 percent of which is garments. But garments have not been targeted by trade barriers so far.

“The IMF just made an evaluation of Cambodia in the meeting, that US tax reforms will benefit Cambodia, projecting a half percentage point increase to GDP growth in the coming year,” he said. Tax cuts for American firms were expected to lead to an increase in their purchases from Cambodia, he added.

But Stephen Groff, ADB’s vice president for East Asia, Southeast Asia and the Pacific, said it was too soon to say what impact US-Chinese trade tensions could ultimately have.

“Trade restrictions between China and the US have not yet been put in place. They are still under discussion and negotiation,” Groff said.

Note: The Asian Development Bank funded travel and lodging expenses associated with this story. They had no influence in the reporting or editing process.

MOST VIEWED

  • NY sisters inspired by Khmer heritage

    Growing up in Brooklyn, New York, Cambodian-American sisters Edo and Eyen Chorm have always felt a deep affinity for their Cambodian heritage and roots. When the pair launched their own EdoEyen namesake jewellery brand in June, 2020, they leaned heavily into designs inspired by ancient Khmer

  • Schools drawn into Manet degree row

    Prime Minister Hun Sen stepped into the Hun Manet-Sam Rainsy war of words over the validity of Manet’s degree from the US Military Academy at West Point, set off by Rainsy’s claims that Manet had received a “second-class degree” or “honorary degree”. Hun

  • Cambodia records first Omicron community case

    The Ministry of Health on January 9 reported 30 new Covid-19 cases, 29 of which were imported and all were confirmed to be the Omicron variant. The ministry also reported 11 recoveries and no new deaths. Earlier on January 9, the ministry also announced that it had detected the Kingdom's

  • The effects of the USD interest rate hike on Cambodian economy

    Experts weigh in on the effect of a potential interest rate expansion by the US Federal Reserve on a highly dollarised Cambodia Anticipation of the US Federal Reserve’s interest rate hike in March is putting developing economies on edge, a recent blog post by

  • PM eyes Myanmar peace troika

    Prime Minister Hun Sen has suggested that ASEAN member states establish a tripartite committee or diplomatic troika consisting of representatives from Cambodia, Brunei and Indonesia that would be tasked with mediating a ceasefire in Myanmar. The premier also requested that Nippon Foundation chairman Yohei Sasakawa

  • NagaWorld protest part of ‘conspiracy’

    The Phnom Penh Municipal Court and police held a joint-press conference on January 4 to clarify details concerning the arrest of nine former employees of the integrated resort NagaWorld and the charges brought against them, saying that the authorities had clear grounds for taking legal action.