Southeast Asia

After Chinese President Xi Jinping visited Phnom Penh next month, which was disappointing for Washington, it returned the trip by renouncing its importance for international relations.

Prime Minister Hun Manet&nbsp stated that” Cambodia’s international scheme is never biased against or detached from any land.” The Royal Government of Cambodia’s official status is that” we maintain good relations with all places based on mutual respect for democracy, independence, and shared interests.” We don’t share any distinct country’s values.

Obviously, the majority of the discussion surrounding Xi’s visit was centered on Trump’s threatened tariffs, which are now halted until July. Sun Chanthol and Cham Nimul, the US Trade Representative’s member, have been holding a video seminar with Jamieson Greer, the US Trade Representative, as of April 16.

The group hasn’t been invited to Washington for more discussions, according to the news. Making matters worse, Beijing’s business ministry announced on April 21 that it” strategically opposes any party to reaching a deal at the price of China’s interests.” Peace won’t be brought about by peace, and settlement won’t be accepted. Importantly, it stated that” China may resolutely taking mutual measures and will never accept it.”

Who knows what the Trump administration will do next in this saga, but I believe we can safely say that the White House’s full tariff strategy has been at best poorly thought out and will continue to be so. One of the few guiding principles he has maintained for years is Trump’s personal peccadillo with trade deficits.

I forgot who made the joke about the “right woke,” but Trump does seem to think of levies as compensation for America’s white working class. Some in his tent appear to be really convinced that tariffs will re-introduce manufacturing to the US in large numbers, as though all socioeconomic background rules can get rewritten by claiming they don’t exist. As likely as Brits creating an empire are, America’s prospects of reindustrialization are.

However, here is a more convincing explanation: the initial Trump administration’s trade war largely consisted of a test run. Place tariffs on China just and watch what happens in a trade war.

China then reversed its trade routes through third countries, including Cambodia, either directly through illegal” shipping,” where Chinese-made products are labeled” Made In Cambodia” and re-exported from Sihanoukville’s port, or by moving production to places like Cambodia.

Trump’s trade war, in the opinion of this writer, has expanded that test by imposing tariffs on nearly every nation in an effort to stop” transshipment” and stop Chinese goods from entering the US market through the proverbial back door. Think of tariffs as third-party restrictions against the Chinese market.

The Trump administration intends to engage in negotiations with more than 70 countries to stop China from moving goods through their borders, stop Chinese companies from locating in their territories, and stop China from importing cheap commercial goods into their economies, according to the Wall Street Journal&nbsp last month.

Take, for example, this week’s announcement that the US Commerce Department will impose taxes as high as 3, 403 % on solar cells and panels imported from Southeast Asia but primarily produced in Chinese-owned factories following a long-running situation that saw Washington establish anti-dumping and countering duties on solar items from four South Asian states next year. Some Chinese firms in Cambodia did charge the highest tariff on renewable imports.

According to Reuters&nbsp, Vietnam’s business department issued a mandate on April 15 to impose a ban on the shipping of items to the US as part of its tariff-avoidance approach, despite it being announced just hours after Trump’s tax announcements on April 2.

Transshipment rates are likely to rise as China dumps more goods into Southeast Asia because America has increased tariffs to as high as 145 % and Beijing has retaliated by imposing duties of 125 % on US goods.

Thus, it appears as though we’re waging a proxy trade war, in which Beijing and Washington might punish other nations for their economic ties to one another. In Southeast Asia, Cambodia is at the center of this conflict, but it has no room to retreat.

Phnom Penh might curtail direct transshipment. As previously mentioned, Vietnam has already indicated that it will strengthen the oversight and inspection of imported goods to determine their origin.

Phnom Penh could also offer a similar commitment, &nbsp, publicly stating that it will, too, increase inspections of goods coming from China. After years of lofty promises that never materialize, whether Washington would trust the government’s promises is another question.

The most troubling aspect of Cambodia’s garment manufacturing supply chain is that it is entirely transshipment-adjacent, which is what makes the country’s economy’s foundation. Essentially, almost all cotton or cloth is imported from China, combined with other products made in Cambodian factories, and then sold to Western ( mostly American ) consumers. Additionally, a sizable portion of garment factories are Chinese-owned.

Of course, this is what many contemporary supply chains look like. However, those who want them to will perceive these things as transshipment. Washington may declare it to be transshipment if it appears to be.

Give Peter Navarro, Trump’s architect of trade wars, ear and ears. Let’s conquer Vietnam. They sell us$ 15 for every$ 1 we sell them when they promise to “we’ll go to zero tariffs,” but that doesn’t mean anything to us because it’s nontariff fraud. He claimed earlier this month that China is transshipping to Vietnam for$ 5 in order to avoid their tariffs. For this, Navarro referred to Vietnam as” a colony of communist China.”

In a conversation with Bloomberg News last week, US Treasury Secretary Scott Bessent seemed to be addressing Southeast Asia more directly.” On our side, we want to avoid transshipment, which has been a big issue. And then, I believe they want to avoid dumping. Because of where these Chinese goods will go. If their biggest export market is shutting down, I don’t believe it will take much prodding.

The issue with Phnom Penh is that it is unable to do anything about this. It’s impossible to separate ourselves from China. Its entire export sector is built entirely on Chinese imports and investments. If you have nothing to export, why would you want zero tariffs on exports? So, if this is a proxy trade war, what is the answer to the two main antagonists ‘ ability to endure?

Trump’s entire tariff policy, as previously stated, is incredibly flawed: It simply won’t accomplish what he believes it will. Inflation and higher prices for American consumers will be what it will achieve, one of the two issues that gave Trump a close victory in November, the other being immigration.

The White House now perceives itself as being in a chickenfight with Beijing. China’s court is where the ball is. China needs to strike a deal with us. Trump’s press secretary, Karoline Leavitt, said last week,” We don’t need to make a deal with them.” Was it on that occasion that she was wearing a” Made in China” dress?

Washington should take note of the pandemic lessons: The Chinese Communist Party can put its citizens under far more stress and economic hardship than any American president can.

Frankly, Xi isn’t taking a flight to Washington anytime soon. That was evident when he refused to attend Trump’s inauguration. Beijing spent the majority of last year getting ready for this circumstance.

It is accurate to say that Trump is quickly destroying the American Empire ( more on that in a later article ) and that his administration is bringing former US stalwarts closer to Beijing.

Meanwhile, Trump’s approval ratings are already declining. They will drop lower as a result of a recession and rising consumer prices. The Republican Party will be considering a successor and how to return to economic normalcy as the midterm elections in late 2026 come closer to being held.

One can see why, if a nation like Cambodia is currently essentially being told by Washington and Beijing that it will face retaliatory measures if its economic policy swivels “pro-US” to avoid sanctions or “pro-China” as Beijing dumps cheaper goods, it would have a good reason to believe that China has much more staying power to inflict harm.

Xi Jinping will be in office for life, replacing Trump, who could abandon his entire tariff plan in a month.

This article was originally published on David Hutt’s Cambodia Unfiltered Substack, and it is now republished with kind permission. Subscribe to Cambodia Unfiltered right here.

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