Cambodia Strengthens US Trade Ties Amid Global Investment Decline
CAC News
Phnom Penh, October 2, 2025 — The Cashew Nut Association of Cambodia (CAC) was among the key stakeholders invited to the Forum on Investment and Trade with the United States, held at the National School of Customs and Excise. The event was presided over by Deputy Prime Minister Sun Chanthol, who also serves as First Vice-President of the Council for the Development of Cambodia (CDC), the country’s primary investment body.
Five member companies of the CAC attended the forum, joining discussions that come at a time of global investment slowdown. According to CDC data presented at the event, global investment trends declined by approximately 11% in 2024. Developed economies, particularly in Europe, were hit hardest, with investment dropping around 58%. While ASEAN saw a modest 10% increase in Foreign Direct Investment (FDI), overall flows to developing countries remained stagnant.
“Cambodia is not immune to global trends,” said Sun Chanthol. “However, our regional position and strong trade partnerships—especially with the U.S.—provide opportunities even in this uncertain landscape.”
Cashew Sector Faces Investment Delays
Prominent business leader Oknha Kith Meng raised Qualified Investment Projects (QIPs) , urging Customs officials, particularly H.E. Chea Vuthy, to streamline the approval process for QIPs. “Investors are reaching out to me directly for intervention,” said Kith Meng.
CAC Chairman Silot Uon echoed concerns in a sideline meeting about the stagnation of this sentiment in the cashew sector. “We have waited nearly two years for the launch of the Cashew Industrial Park (CIP), and this delay is deterring new investors from getting QIPs,” Silot stated.
U.S. Market: Opportunities and Risks
Despite the global downturn, Cambodia’s trade with the U.S. remains a bright spot. Exports to the United States surged 95% from 2020 to 2024, making it the Kingdom’s largest export market. However, the introduction of a 19% U.S. reciprocal tariff on Cambodian goods has raised concerns.
“This presents a dual challenge,” said a one of US businessmen. “We must maintain U.S. market access while ensuring Cambodia remains attractive to investors.”
Overdependence on the U.S. market is seen as a vulnerability, especially amid rising demands from investors for regulatory predictability, improved infrastructure, and a skilled workforce. Additional concerns include the cost of compliance with both domestic and international buyer standards.
Combatting Origin Fraud and Ensuring Trade Integrity
To address these issues, the Ministry of Commerce is stepping up efforts to combat fraudulent declarations of origin. Exporters must now comply with stricter rules under the Law on Rules of Origin, ensuring goods exported to the U.S. are transparently and verifiably of Cambodian origin.
These legal measures are designed to protect Cambodia’s credibility in the U.S. market, while also boosting investor confidence.
Tariff Concessions and Pending Trade Deal
As part of ongoing negotiations for a reciprocal trade agreement, the U.S. imposed a 19% reciprocal tariff on Cambodian goods as of July 31, 2025. This rate reflects Cambodia’s commitments, including reductions in customs duties and non-tariff barriers.
In return, Cambodia has implemented a 0% customs duty on qualifying U.S. goods. To benefit from this duty-free access, U.S. imports must meet several conditions:
- Be wholly or substantially produced in the U.S.
- Be shipped directly (with some allowances for transshipment).
- Not be second-hand goods.
- Be accompanied by a valid Declaration of Origin (DO Form US).
This concession will remain in place until the reciprocal trade agreement is finalized.
Outlook for 2025: Uncertainty Persists
The CDC warns that global investment is expected to continue declining into 2025, with economic and policy uncertainties contributing to record-low project numbers and capital commitments in the first quarter of the year.
While sectors like the digital economy are seeing increased interest, investment in supply chain-intensive and infrastructure-related industries has plateaued or declined.
Despite these headwinds, Cambodian officials remain cautiously optimistic. “We must continue to reform, diversify our markets, and safeguard our economic credibility,” said Sun Chanthol. “Only then can we navigate the volatility ahead.”