Trump Administration's Major Policy Shift on Cambodia Aims to Expand Bilateral Ties Against China

The Trump administration is enacting a significant policy shift regarding Cambodia, aiming to forge closer diplomatic and security relationships with Phnom Penh. This move comes despite persistent concerns over human rights, democratic governance, and China's expanding influence in the region.

In a notable reversal, the U.S. lifted arms embargoes and export restrictions on Cambodia in November 2025. These prohibitions were initially imposed in 2021 due to issues related to human rights, corruption, and China's military presence. Concurrently, the U.S. government has terminated a substantial number of programs managed by the U.S. Agency for International Development (USAID) in Cambodia. Furthermore, the appropriations bill for fiscal year 2026 removes conditions previously attached to a portion of U.S. aid to Cambodia since fiscal year 2017, which linked assistance to human rights and China's influence.

Cambodia, with its population of 17 million, finds itself at a critical juncture where the interests of the United States and China intersect in Southeast Asia. Prime Minister Hun Manet, a graduate of West Point and New York University, assumed leadership in 2023, succeeding his father Hun Sen, who ruled for 38 years. Despite expectations of political change from the Western-educated leader, Cambodia continues to maintain several repressive policies and has not implemented substantial governance reforms, according to a report by the Congressional Research Service (CRS).

The U.S. strategy reflects an effort to expand bilateral ties with Cambodia while simultaneously working to counter China's influence in Southeast Asia. China is Cambodia's largest source of foreign investment and its primary import partner, holding 41% of Cambodia's foreign debt as of 2023. Beijing's expansion of facilities at the Ream Naval Base since 2022 has heightened Washington's concerns about potential Chinese military access, though both Cambodian and Chinese officials deny Beijing's exclusive rights to the base. Chinese investment also extends to Cambodia's infrastructure and development sectors, including the $1.1 billion Funan Techo Canal project initiated in 2024 and various industrial parks, international airports, and deep-water seaports. Some Chinese-linked investments in Sihanoukville have also been associated with cyber fraud activities involving Chinese criminal organizations.

Alongside its push for closer relations, the Trump administration has also offered new forms of assistance. The U.S. has announced $36 million for a five-year bilateral health partnership program and is allocating funds from a $45 million aid package supporting the "Kuala Lumpur Peace Accords" between Cambodia and Thailand. The CRS report also notes approximately $5 million in unexploded ordnance clearance funding provided through this agreement. This policy shift coincides with Congress easing certain restrictions. While appropriations bills since fiscal year 2017 have included conditions on some aid to Cambodia related to human rights, Chinese influence, and other concerns, these limitations are absent from the fiscal year 2026 bill.