Bilateral trade between Cambodia and the US fell by 10 per cent in the first seven months of 2023 to around $5.3 billion from $5.9 billion in the same period in 2022.
The US market accounts for more than 97 per cent of Cambodia’s total trade volume, according to the General Department of Customs and Excise of Cambodia (GDCE).
Between January and July 2023, exports to the US dropped 9.1 per cent to $5.2 billion while imports from the US came in around $141.6 million, down 28 percent year-on-year.
In the period, Cambodia’s trade balance with the US stood at $5.04 billion, a surplus compared to a trade deficit with China of more than $7.1 billion.
For the month of July, GDCE stated that trade between Cambodia and the US declined 10.4 per cent to $964.9 million, from $1.1 billion in July 2022. Of that, Cambodia’s exports contracted by 10.1 per cent to $941.9 million and imports narrowed 22.6 per cent to $22.04 million.
Cambodia Chamber of Commerce vice-president Lim Heng told The Post on August 14 that the economic crisis which has prolonged for more than three years, compounded by the Russia and Ukraine war, since early 2022, has reduced international trade activity in almost all countries.
The decline in trade volume between Cambodia and the US occurred in the second half of 2022 due to uncertain economic growth globally, which forced people to reduce unnecessary spending.
Most of Cambodia’s exports to the US are textile products, which is why orders from the US are declining.
“Growth in trade volume between the two countries will recover once the world economy and tourism improves, so orders for clothes, shoes and travel products from Cambodia will jump again,” he said, adding that imports from the US include autos, machinery, electronics and medical equipment.
Another reason why Cambodia’s exports decreased is related to the removal of the preferential tariff system on solar panel products produced in four countries in Southeast Asia: Cambodia, Malaysia, Thailand and Vietnam.
The preferential tariff system was removed by the US government in early May 2023, after providing it in 2022.
Cambodia Footwear Association president Ly Kunthai told The Post last weekend that the decline in textile exports to international markets, especially the US in the past year, is mainly due to two factors.
The first being the decline in global demand, and secondly a high growth in orders which was recorded in late 2021 and early 2022 due to the non-operation of factories in some countries at the time.
“The decline in exports to the US, as well as other destinations in recent months, is entirely due to external factors, as domestic production capacity is still strong,” he said.
In 2022, bilateral trade between Cambodia and the US totalled $9.3 billion, an increase of 18.6 per cent over 2021, which registered an export value of $7.8 billion.
Broken down, GDCE data showed that exports rose to $9 billion of Cambodia’s exports whereas imports slipped seven per cent to $312.5 million.