The new 10% tariff imposed by the U.S. on July 24 should not be viewed as an additional tax on the existing 19% reciprocal tariff, Deputy Prime Minister Sun Chanthol and First Vice President of the Council for the Development of Cambodia (CDC), said.
The reciprocal tariff was announced by the U.S. President Donald Trump last year, but struck down later by the U.S. Supreme Court.
Chanthol said the 10% tax would be imposed with the most favored nation (MFN) rate that has been in place by the US Congress in the past, but he did not disclose the MFN rate during a press conference on Monday.
“They [the United States Trade Representative] promised us that they will not allow Cambodia to lose its competitiveness against neighboring countries,” he added.
The USTR imposed a 10% tariff under Section 301 of the Trade Act 1974 which took effect last Friday targeting trading partners with forced-labor import restrictions. The 10% tariff would affect imports from Cambodia, Malaysia, and Indonesia, while Vietnam, Thailand, Philippines and Singapore face a higher rate of 12.5%.
The new Section 301 tariff is focused on forced-labor concerns and excess capacity, Chanthol said, adding that Cambodia has only one remaining issue related to excess capacity which is being investigated by the USTR. The outcome would be announced in two or three months.
He said Cambodia would continue to strive to attract U.S. investment and diversify trade and investment partners rather than rely on a single country.
“To attract FDI from the U.S. we continue to promote investment [opportunity] in the U.S. Recently, we met with the U.S. ASEAN Business Council which is part of our effort to increase investment from the U.S.” Chanthol said.
“If we look at the profile, the statistics show that Cambodia relies on one country. Cambodia does not want only one country. We want to diversify our economy, trade and investment portfolio,” he said.
In the first half of 2026, Cambodia’s exports to the U.S. reached $7.5 billion, marking a 41% growth compared to the same period in 2025, according to the General Department of Customs and Excise (GDCE).
Hong Vannak, a business researcher at the Royal Academy of Cambodia, said that the comparatively lower 10% tariff than its neighbours is a good sign for Cambodia which produced garment products for export to the U.S.
“It [the tax helps] to develop Cambodia’s strength and fulfill conditions in their [export] markets, especially the enhancement of politics and diplomacy with the United States,” he said.
Kang Monika, deputy secretary-general at Textile, Apparel, Footwear and Travel Goods Association (TAFTAC), could not be reached for comment.
