U.S. investment talks underway, driven by Cambodia's tariff negotiation team
In the heart of global trade negotiations, the US and Cambodia are actively engaged in discussions aimed at strengthening their bilateral relations. The focus of these talks, primarily centred around the Trade and Investment Framework Agreement (TIFA), revolves around tariff rates and direct investment.
The current negotiations, which began in May 2025, have been ongoing since the TIFA was first initiated. The latest development came in July, when President Donald Trump announced a 36% reciprocal tariff on Cambodian exports, effective from August 1, 2025. This marked a reduction from the initial 49% tariff rate set in April, but still poses a substantial barrier.
Cambodian officials, led by Deputy Prime Minister Sun Chanthol and Minister of Commerce Cham Nimul, have been negotiating concessions such as increased US imports and expanded market access to secure more favourable terms. However, the exact final tariff rate is yet to be finalised and is awaiting approval from the US President.
The 2025 US-Cambodia trade agreement is playing a pivotal role in regional infrastructure and investment, particularly in the aerospace and aviation sectors. Projects like Cambodia's $1.1 billion Techo International Airport, operated by a French company but supported by US strategic investment, highlight increased US infrastructure investments aimed at boosting regional connectivity and counterbalancing China's influence in Cambodia.
These investments emphasise transparency and sustainability, creating strategic opportunities for defense contractors, infrastructure developers, and logistics firms in Cambodia and Southeast Asia, linked to the trade agreement.
The Cambodian delegation, currently in the US for negotiations, participated in the first round of TIFA talks from May 13 to 14, 2025. The purpose of these meetings, as stated by Chanthol, was to strengthen existing cooperation between Cambodia and the US, while exploring new opportunities to deepen the bilateral relationship.
As of August 2025, total trade between Cambodia and the US stood at $10.18 billion, a 11.2% increase over 2023. Exports to the US in 2024 were valued at $9.9 billion, up 11.4%, while US imports were worth $264.14 million. The US remains Cambodia's largest export market.
Hong Vanak, an economist at the Royal Academy of Cambodia, stated that these discussions are vital for showcasing Cambodia's investment potential to American officials and investors. Chanthol further stressed that Cambodia offers many advantages for American companies to invest, including a young labor force and a strong commitment from the Royal Government to facilitate private sector operations.
In addition to the TIFA meeting, the delegation held working meetings with several US officials, including Senators Tammy Duckworth and Adrian Smith, and representatives Carol Miller, Adam Smith, Beth Van Duyne, and Adrian Smith.
As the negotiations continue, both parties are hopeful for a mutually beneficial agreement that will foster stronger economic ties between the US and Cambodia.
[1] Source: The Phnom Penh Post, Hin Pisei [3] Source: The Diplomat, Katherine Afton [5] Source: The Washington Post, Simon Denyer
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