U.S. May Grant Zero Additional Tariff on Cambodian Garments Using American Cotton

PHNOM PENH, July 27, 2026 (KPT) – Garment exports made with U.S.‑sourced cotton and fabric could potentially receive zero additional tariffs when entering the American market, under a trade arrangement being considered by Washington, Deputy Prime Minister Sun Chanthol said Monday.

Chanthol, who is also First Vice‑Chairman of the Council for the Development of Cambodia, told reporters that Cambodia is among four countries eligible for the proposed “MFN + 0” tariff treatment or a tariff‑rate quota if manufacturers source cotton and fabric from the United States, produce garments locally and export them back. The four countries are Cambodia, Malaysia, Indonesia and Bangladesh.

“If we purchase cotton and fabric from the United States to produce garments in Cambodia before exporting them back, the United States is considering this arrangement,” Chanthol said.

The proposal comes after Cambodia received a new 10 percent U.S. tariff rate on July 23. Chanthol said Cambodia, Malaysia and Indonesia face the 10 percent rate, while Thailand and Vietnam face 12.5 percent. He clarified that Cambodia’s 10 percent rate applies on top of the Most‑Favored‑Nation tariff and is not an additional charge on the previous 19 percent reciprocal tariff.

Cambodia also remains among 16 countries under U.S. investigation related to excess capacity, with results expected within two to three months. Chanthol said U.S. trade representatives assured Phnom Penh that the reciprocal tariff would not exceed 19 percent.

He added that the United States is already providing “MFN + 0” treatment on 154 tariff lines, underscoring potential opportunities for Cambodian exporters.