Phnom Penh, Cambodia – Cambodia has achieved a significant milestone, becoming the first country in the world to successfully conclude negotiations for a reciprocal tax agreement with the United States. This historic agreement was finalized around October 2025. The announcement was made by Mr. Sun Chanthol, Deputy Prime Minister and First Vice President of the Council for the Development of Cambodia (CDC).
Speaking at the closing ceremony of the Ministry of Commerce’s 2025 work summary and 2026 work plan conference on January 9, Mr. Sun Chanthol emphasized the critical importance of this reciprocal tax agreement with the United States. He highlighted its potential to significantly boost investor confidence and attract new foreign direct investment into the Kingdom.
Mr. Chanthol provided a compelling example of the agreement’s immediate impact. He recounted a meeting with a major US company that is a substantial purchaser of medical equipment from Cambodia. This company, which currently operates factories in Vietnam, Malaysia, and Indonesia, affirmed its commitment to investing in Cambodia. Following the successful negotiation of the tax agreement, the company pledged an investment ranging from $500 million to $1 billion to establish new medical equipment manufacturing facilities in Cambodia. This commitment, Mr. Chanthol asserted, is a direct result of the reciprocal tax agreement signed in October 2025.
Beyond attracting investment, Mr. Sun Chanthol further noted that the tax agreement with the United States will play a vital role in strengthening supply chains, supporting Cambodian exports, and creating additional job opportunities for its citizens.
According to data from the Ministry of Commerce, the trade relationship between Cambodia and the United States reached a total value of $13.14 billion throughout 2025, marking a substantial increase of 29.24 percent compared to 2024. During this period, Cambodia’s exports to the US amounted to $12.73 billion, growing by 28.48 percent. Concurrently, Cambodia’s imports from the US totaled over $417 million, experiencing a significant rise of 57.83 percent.
The primary goods Cambodia exported to the US market included garments, travel goods such as suitcases and bags, bicycles, various components, and other consumer products. Conversely, Cambodia’s imports from the US comprised vehicles, machinery, jewelry, cosmetics, electrical and electronic equipment, and other general consumer items.
Currently, Cambodia is undergoing a significant economic transformation, evolving from an economy heavily reliant on the garment industry to one with a diversified manufacturing and export base. This diversification now includes electronics and agro-industry sectors. The nation has consistently achieved record-high investment approvals for two consecutive years. In 2025 alone, the Council for the Development of Cambodia approved 630 new projects, representing a total investment capital of $10 billion and projected to create over 430,000 jobs.
