Cambodia to Scrap Tariffs, Buy 20 Boeing Jets in US Trade Deal

Cambodia has agreed to scrap tariffs on US goods and purchase up to 20 Boeing 737 Max jets in a bid to narrow its trade deficit with the US. The deal follows a 19% tariff imposed by the Trump administration on imports from Cambodia and neighboring Thailand. National carrier Air Cambodia is negotiating the jet deal with an option for 10 more planes.

Cambodia has agreed to scrap tariffs on US goods and purchase up to 20 Boeing 737 Max jets as part of a deal to narrow its trade deficit with the United States. The agreement follows a 19% tariff imposed by the Trump administration on imports from Cambodia and neighboring Thailand. The national carrier, Air Cambodia, is negotiating the jet deal with an option for 10 more planes [1].

The tariff rate of 19% on Cambodia's exports to the US has helped the country avoid the collapse of its vital garment and footwear sector, allowing it to remain competitive with its peers. Cambodia's deputy prime minister, Sun Chanthol, thanked US President Donald Trump for his understanding and intervention in the negotiations to reduce the tariff rate from initially set levels of 49% or 36%, which would have had a "huge" economic impact [1].

The deal agreed with the US is a framework, with a final agreement to be finalized later. Cambodia has agreed to buy 10 Boeing BA 737 MAX 8 aircraft for its national carrier, Air Cambodia, with the option to purchase another 10. The deputy premier stated that Cambodia's approach was to put everything on the table and negotiate in good faith to ensure both countries benefit from the trade deal [1].

Cambodia's exports to the US market accounted for 37.9% of its total shipments in 2024, valued at close to $10 billion, according to official data. Much of this was textiles and shoes, a sector crucial to Cambodia's economy, which is projected to reach $49.8 billion this year, driven by manufacturing for brands such as Adidas, H&M, Ralph Lauren, and Lacoste [1].

The trade agreement with the US is part of a broader trend of countries negotiating to avoid higher tariffs imposed by the Trump administration. Several trading partners, including South Korea, the UK, the EU, Vietnam, Indonesia, the Philippines, and Japan, have struck deals to avoid the higher tariffs. However, the deadline for these negotiations is August 1, and countries that fail to reach agreements may face higher tariffs [2].

The US has also imposed tariffs on other countries, including Mexico, Canada, China, India, Taiwan, and Brazil. Mexico is set to be hit with a 30% tariff, while Canada could face a 35% tax on Canadian goods. Trade talks with China have followed a different path, with both sides engaging in tit-for-tat tariffs that peaked at 145% for Chinese imports and 125% for US goods [2].

The Trump administration has been actively modifying tariff rates under a declared national emergency to address U.S. trade deficits. The latest executive order adjusts duties on goods from specific trading partners, including Iraq, Laos, Switzerland, and India, while the EU faces a conditional structure. Penalties are imposed on transshipment schemes, and implementation will be overseen by senior officials [3].

References:
[1] https://www.tradingview.com/news/reuters.com,2025:newsml_P8N3QF08B:0-cambodia-deputy-pm-says-19-us-tariff-rate-averts-collapse-of-its-garments-manufacturing-sector/
[2] https://www.newsweek.com/tariffs-trade-deals-map-donald-trump-2106898
[3] https://economictimes.indiatimes.com/news/international/global-trends/trump-signs-executive-order-to-raise-tariffs-on-key-trading-partners-citing-trade-deficit-national-security/articleshow/123033175.cms