As far as I remember, the USA did not apply duty free quota free access to Asian LDCs, to maintain some margin of market access preference to African and Caribbean low-income producers. Despite that, Asian LDCs did pretty well on the US market. Bangladesh, the main competitor of Cambodia, is due to lose its LDC status pretty soon. So, I would not be too concerned about tariffs, as long as they remain reasonable. Biggest issue may come from the campaign in Europe and other developed economies against fast-fashion. I suspect it may affect Cambodian producers specialising in low-cost apparel. My two cents.

The United States has historically not granted duty free, quota free (DFQF) market access to Least Developed Countries (LDCs) in Asia, including Cambodia and Bangladesh. This policy contrasts with the preferential treatment given to African and Caribbean LDCs under programs such as the African Growth and Opportunity Act (AGOA), intended to maintain a competitive advantage for those regions (UNCTAD, 2020). Nevertheless, Asian LDCs have performed relatively well in the U.S. market, particularly in the garment sector. Bangladesh, for example, has become a leading apparel exporter to the United States and a key competitor to Cambodia, despite not enjoying the same level of tariff preferences (UNCTAD, 2020). Bangladesh is scheduled to graduate from its LDC status by 2026, which may result in higher tariffs in major export destinations unless transition periods like the one offered by the European Union until 2029 are implemented (United Nations, 2024; Fashionating World, 2024).

However, the more pressing concern may not be tariffs, but rather the growing campaigns in Europe and other developed economies against fast fashion. These movements criticize the unsustainable nature of mass-produced, low-cost apparel, citing labor rights violations and environmental degradation. For instance, Greenpeace and the Clean Clothes Campaign have reported that textile waste from major brands is being incinerated in brick kilns in Cambodia, posing serious environmental and health risks (Greenpeace, 2023; Truthout, 2023). Since the garment industry remains a cornerstone of Cambodia’s economy comprising over 600 factories and employing hundreds of thousands the global shift toward ethical and sustainable fashion production may significantly affect its export competitiveness (Fashion Revolution, 2024). Therefore, while tariff levels remain manageable, the broader challenge for Cambodian manufacturers lies in adapting to evolving sustainability expectations in key international markets.

References:

• UNCTAD. (2020). The impact of market access conditions on LDC exports. Retrieved from https://unctad.org/system/files/official-document/poditctabm7.en.pdf
• United Nations. (2024). Bangladesh Graduation from LDC Status. Retrieved from https://www.un.org/ldcportal/content/bangladesh-graduation-status
• Fashionating World. (2024). Bangladesh to lose LDC status in 2026. Retrieved from https://www.fashionatingworld.com/new1-2/bangladesh-to-lose-ldc-status-in-2026
• Greenpeace. (2023). Cambodian workers pay the price of fast fashion’s waste problem. Retrieved from https://www.greenpeace.org/southeastasia/story/45543
• Truthout. (2023). European Protesters Feign Illness Over Fast Fashion's Impact on Workers in Cambodia. Retrieved from https://truthout.org/articles/european-protesters-feign-illness-over-fast-fashions-impact-on-workers-in-cambodia
• Fashion Revolution. (2024). Cambodia Country Profile. Retrieved from https://www.fashionrevolution.org/asia/cambodia

The biggest challenge tariffs pose to Cambodian garments is their heavy reliance on exports, meaning higher costs can reduce competitiveness and lead to job losses in a labor-dependent sector, but an unexpected opportunity lies in pushing the industry to diversify markets, upgrade skills, and improve value-added production to become less vulnerable to tariff-driven shocks.

Tariffs on Cambodian garments present a major challenge due to the country’s reliance on garment exports for economic growth and employment, yet they could also serve as an unexpected opportunity by prompting industry diversification, policy reforms, and a strategic pivot toward new markets or higher-value-added production.