Dr. Seun Sam

The increasing trade rivalry between the United States and China has effects on nations in the Asia Pacific area like Cambodia. This becomes more critical with the possibility of Donald Trump’s comeback to the presidency as it is anticipated to heighten trade disputes. If Trump pursues a stance against China again, Cambodia, a modest yet strategically positioned economy must weigh its choices thoughtfully to manage these challenges effectively.

China is currently the investor and key development ally for Cambodia; however, the United States plays a role as a significant market and backer of democratic governance in the country. To ensure Cambodia’s economic progress and political stability is safeguarded, it is important to handle trade tensions.

The trade tensions between the United States and China during Trumps presidency were characterized by increased tariffs and restrictions on technology transfer as efforts to reduce economic interdependence between the two countries—a period marked by significant strain in their bilateral relations. Although the Biden administration has carried forward some of these policies from the administration’s approach to China relations, there is a possibility that a return of Trump to power could lead to a renewal of trade conflicts and the implementation of measures aimed at curbing China’s economic influence. These escalating tensions are anticipated to have effects on nations like Cambodia that have economic connections with both the US and China.

Cambodia’s Important Economic Connections

China’s Impact; For a time now, China has been investing in Cambodia’s infrastructure related sectors such as agriculture and real estate development. This investment has greatly changed places like Sihanoukville into business centers, has made China the biggest provider of foreign direct investment (FDI). Moreover projects like the Belt and Road Initiative ( BRI ) are expected to bring about enhancements in connectivity and trade routes.

The United States plays a role as a market for Cambodia’s garment industry and textile exports – industries that play a crucial part in Cambodia’s economy and job market.

In the face of trade tensions escalating during Trumps presidency Cambodia could face three scenarios;

There is a growing expectation, for countries due to Trumps foreign policy concerning China in areas such as trade and regional security matters, Cambodia may need to navigate carefully by possibly reducing Chinese investments or limiting partnerships with Chinese tech companies in order to maintain good relations with the US. Balancing these demands without offending either country will call for diplomatic skill and tact.

Cambodia faces risks due to its dependence on China’s economy that could leave it vulnerable to potential consequences such as trade restrictions or sanctions imposed by the US on countries with significant Chinese investments.

Amid rising tensions in Cambodia include panels which can give rise to economic diversification opportunities as other nations look for investment alternatives apart from China due to reasons like tariffs or supply chain issues which may lead them to promote Cambodia as a manufacturing center for companies shifting their operations from China.

Tactics for Maneuvering Through Trade Rivalry

Enhancing ASEAN Integration; Being part of ASEAN gives Cambodia the opportunity to benefit from collaborating with neighboring countries to counter influences effectively. By endorsing ASEANs role in regional security and economic collaboration towards a more extensive network that promotes impartiality and non-alignment amid the US-China competition.

Cambodia should aim to expand its partnerships to lessen its dependence on China by seeking trade deals with countries like Japan and South Korea as well as the European Union (EU). By joining the Regional Comprehensive Economic Partnership (RCEP), Cambodia opens up avenues for trade relationships and investment beyond interests.

Investment in Cambodia’s industries and infrastructure is key to enhancing the country’s resilience against influences and pressures. By fostering a self-economy supported by local sectors, Cambodia can decrease its dependence on any one partner. Efforts to enhance skills provide training and promote technological innovation in local businesses will not only attract a variety of investments but also help mitigate the impact of trade disruptions.

Building Stronger Connections with Both Superpowers; In managing ties with the United States and China carefully, Cambodia should aim to bolster interactions that promote collaboration on priorities without forming overly strong alliances with either party. For instance Cambodia could collaborate with China on infrastructure and growth initiatives while also working towards trade deals or security alliances with the United States that honor Cambodia’s independence and autonomy.

Develop a Balanced Foreign Policy Approach; Cambodia’s historical strategy of non-alignment could be beneficial in this situation by promoting a stance that highlights the significance of both the US and China as allies through a "peaceful coexistence" perspective. This non alignment tactic can act as a safeguard by positioning Cambodia as a mediator between the two nations than taking sides in their competition.

In light of escalating trade tensions between the US and China and the uncertainties surrounding a Trump presidency in Cambodia’s decisions about its economy and trade policies need to strike a careful balance between challenges and opportunities presented by these developments. To stay resilient amidst great power competition, Cambodia can focus on strengthening its connections within ASEAN countries, diversifying its economy, and maintaining a policy of neutrality. By adopting an adaptable strategy Cambodia can continue its growth trajectory protect its sovereignty and secure its interests in an evolving landscape defined by the rivalry between the US and China. By taking this rounded strategy, Cambodia can maintain its position as an ally while also asserting its independence within the changing regional context.