(Phnom Penh): A policy brief published today by the Asian Development Bank (ADB) looks at the potential economic and social impacts of the United States’ tariff on Cambodian imports in 2026 and beyond, highlighting the resilience and vulnerabilities of Cambodia’s export-driven economy.
The brief, Economic Impacts of the United States Tariff on Cambodia, was written with support from Cambodia Development Resource Institute. It simulates how three plausible tariff levels—low (10%), medium (19%), and high (36%) — would affect Cambodian growth, jobs, poverty, and government finances. The analysis shows that the currently active 19% tariff, secured in August 2025 following bilateral negotiations, would have a negligible impact in the country over the coming years.
But the brief also warns that the situation remains precarious and sensitive. The high tariff would slow economic growth by nearly 1 percentage point, push over 100,000 people into unemployment, and increase the poverty rate by over 1 percentage point, reversing some of the recent progress in poverty reduction. The impact would be especially severe for workers in the garment and electronics sectors, who would likely move into lower-paying sectors like agriculture and basic services.
“Government and industry experts have been monitoring the situation closely for months. Their intuition was that the high tariff proposed earlier in the year would have been a heavy economic burden, but that the current 19% tariff rate is not. Economic modelling confirms that the current tariff is indeed manageable, while demonstrating that a higher tariff would have dire consequences for Cambodian families through unemployment and poverty,” said Milan Thomas, ADB Country Economist for Cambodia and lead author of the brief.
The brief draws on economic modelling by Victoria University’s Center of Policy Studies and the latest household survey data from Cambodia’s National Institute of Statistics. It recommends that in the event of tariff escalation, temporary relief measures, including social transfers, employment services, and training programs, may need to be strengthened to ease labor market transitions and protect vulnerable populations. In the longer term, ongoing investments in economic competitiveness through infrastructure, human capital, and business reforms will build Cambodia’s resilience to future shocks.
ADB is a leading multilateral development bank supporting inclusive, resilient, and sustainable growth across Asia and the Pacific. Working with its members and partners to solve complex challenges together, ADB harnesses innovative financial tools and strategic partnerships to transform lives, build quality infrastructure, and safeguard our planet. Founded in 1966, ADB is owned by 69 members—50 from the region.
=FRESH NEWS
