{"id":10630,"date":"2026-06-29T16:32:40","date_gmt":"2026-06-29T08:32:40","guid":{"rendered":"https:\/\/www.manhattansez.com\/?p=10630"},"modified":"2026-06-29T16:32:43","modified_gmt":"2026-06-29T08:32:43","slug":"cambodia-hardware-metal-manufacturing","status":"publish","type":"post","link":"https:\/\/www.manhattansez.com\/en\/cambodia-hardware-metal-manufacturing\/","title":{"rendered":"Hardware & Metal Manufacturing in Cambodia: Materials, Export Routes & Operating Costs"},"content":{"rendered":"\n
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Article Summary<\/strong>\uff1a<\/strong>
Over the past two years, setting up a hardware factory in Southeast Asia<\/strong> has become a popular option. Unlike apparel’s mature clusters, hardware (metal products) is still a nascent industry in Cambodia, and metal raw materials are almost entirely imported \u2014 in 2023 Cambodia imported about US$636 million in iron and steel products, around 60% from China. So when a hardware company evaluates Cambodia, it is less about “sourcing nearby” and more about “using imported materials plus Cambodian processing to capture labour-cost savings and market positioning.”
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But one variable must be understood first: steel, aluminium, copper and their derivatives exported to the US are subject to the US Section 232 tariff (charged on full value from April 2026 \u2014 50% on primary metals, 25% on derivatives), regardless of country of origin and exempt from general add-on tariffs.

This means that for steel\/aluminium hardware bound for the US, Cambodia has no separate tariff advantage. On top of this, the US reciprocal tariff on Cambodia (originally 19%) was ruled invalid by the Supreme Court in February 2026 and replaced by a provisional Section 122 tariff, so overall US-bound tariffs are highly uncertain. This article analyses metal raw-material sourcing, export routes and tariff reality, operating costs, and which kinds of hardware companies suit Cambodia and how to assess it.<\/p>\n<\/blockquote>\n\n\n\n

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Introduction: where hardware manufacturers turn when tariffs and costs squeeze at once<\/strong><\/h2>\n\n\n\n

Many Chinese hardware (metal-products) factories have been squeezed by two forces over the past two years: on one side, labour and land costs rising year after year; on the other, US tariffs and buyers’ “China+1” requirements. Moving part of their capacity to Southeast Asia has become an increasingly practical option.<\/p>\n\n\n\n

But hardware is not apparel. When apparel comes to Cambodia, it is drawn by mature industrial clusters and nearby fabric supply; hardware’s metal raw materials are almost unavailable in Cambodia and must be entirely imported, while the US-bound tariffs it cares about most involve a set of rules completely different from apparel’s. So the first question in setting up a hardware factory in Southeast Asia<\/strong> is often not “whether to go,” but “whether your own product is a good fit” \u2014 and to answer it, we first need to lay out exactly what stage this industry is at in Cambodia.<\/p>\n\n\n\n

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Face the reality first: Cambodia’s hardware industry is still nascent and raw materials are almost entirely imported<\/strong><\/h2>\n\n\n\n

Unlike apparel’s mature, million-strong clusters, Cambodia’s hardware industry is still at an early stage; there is no upstream production of steel or non-ferrous metals locally, and metal raw materials are almost entirely dependent on imports.<\/strong><\/p>\n\n\n\n

“Hardware” here refers broadly to building hardware, fasteners (screws, bolts), tools, metal stamping and sheet-metal parts, aluminium parts, stainless-steel parts and other metal products, mostly involving metal processing, stamping and surface treatment; what they have in common is that metal is the main raw material \u2014 and this is precisely what Cambodia most lacks.<\/p>\n\n\n\n

The data bears this out. In 2023, Cambodia imported about US$636 million in iron and steel products (HS73), mainly from China (about US$378 million), Thailand (about US$111 million) and Vietnam (about US$61 million); exports of the same products were negligible. In other words, Cambodia is currently a net importer of metal products, with neither steelmaking and rolling nor smelting and rolling capacity for non-ferrous metals such as aluminium, zinc and copper.<\/p>\n\n\n\n

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\"Hardware<\/figure>\n\n\n\n

[ Figure 1: Cambodia’s import sources of iron and steel products]<\/strong> (Source: OEC \/ UN COMTRADE, 2023; HS73 iron and steel products)<\/p><\/p>\n\n\n\n

This means two things. First, a hardware company in Cambodia essentially operates an “import metal raw materials + local processing” model, where raw-material sourcing and logistics management are decisive \u2014 not reliance on a local supply chain. Second, precisely because the industry is still nascent, its clusters, upstream support and skilled workforce are less complete than apparel’s, so new entrants must build more of the chain themselves \u2014 this is where it must be viewed differently from the apparel chapter, and a limitation to face pragmatically when assessing.<\/p>\n\n\n\n

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Raw-material sourcing: where the metal comes from, and managing cost and lead time<\/strong><\/h2>\n\n\n\n

Since raw materials are entirely imported, a hardware company’s cost and lead time hinge on the design of three things: where the metal is imported from, how it is shipped, and how it is cleared through customs.<\/strong><\/p>\n\n\n\n

On sourcing, steel, aluminium, zinc, copper and semi-finished hardware are mostly imported from China, with some from Thailand and Vietnam. Geographically, the Cambodia\u2013Vietnam border (such as the Bavet area) is about a day’s drive from Vietnam’s Ho Chi Minh City supply circle, allowing companies to tranship or source some materials and consumables nearby from Vietnam and shorten replenishment cycles; bulky, steady-volume metal raw materials can be shipped by sea to Sihanoukville Port or the Ho Chi Minh City port cluster and then trucked to the plant. The key in sourcing is to match two rhythms \u2014 direct sea shipment and nearby replenishment \u2014 by product type and batch size, to avoid line stoppages from material shortages.<\/p>\n\n\n\n

On tariffs and rules of origin, the “Chinese materials + Cambodian processing” configuration can, in Asia-Pacific markets, use the cumulative rules of origin of RCEP and the China\u2013Cambodia FTA (CCFTA) to meet origin requirements and obtain preferential rates. CCFTA took effect in 2022, with China granting Cambodia zero tariffs on about 97.5% of tariff lines and Cambodia granting China about 90%; used together with RCEP, it further facilitates the flow of materials and components between China and Cambodia (for the RCEP cumulation mechanism, see “Cambodia’s Export Advantages under the RCEP Framework<\/a>“). But note in particular: these cumulation rules apply to RCEP and related agreement member markets, and do not apply to US steel\/aluminium tariffs \u2014 the reason is in the next section.<\/p>\n\n\n\n

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Export routes and tariff reality: US Section 232 is the variable you must understand first<\/strong><\/h2>\n\n\n\n

Hardware’s US-bound tariffs cannot be bypassed through Cambodia’s country-specific preferences. Steel, aluminium, copper and their derivatives are subject to the US Section 232 tariff \u2014 charged on full value from April 2026, at 50% on primary metal products, 25% on derivatives and 15% on some industrial equipment, regardless of country of origin and exempt from general add-on tariffs.<\/strong><\/p>\n\n\n\n

[Chart to be inserted \u2014 Figure 2: Tariff tiers for hardware exported to the US]<\/strong> (June 2026; rates and coverage depend on HS code and the latest announcements, and are currently undergoing legal change)<\/p><\/p>\n\n\n\n

First, the Section 232 layer. The US Section 232 tariff on steel and aluminium rose to 50% in June 2025 (copper 25%), and in 2025 was substantially extended to “derivatives” \u2014 covering fasteners, tools (Chapter 82), various metal products (Chapter 83), machinery parts and structural components, exactly where many hardware items sit.

From April 2026, the US further changed it to charge on the full value of the goods (rather than only the metal content): 50% on primary metal products, 25% on derivatives substantially made of metal, and 15% on some metal-intensive industrial and grid equipment (provisional through end-2027); the Section 232 tariffs on steel, aluminium and copper do not stack on each other (a given good is charged only one). Its most critical feature: it applies globally, regardless of country of origin, and metal products subject to Section 232 are excluded from the US general add-on tariffs.<\/p>\n\n\n\n

The combined conclusion of this layer is direct: for steel\/aluminium hardware products covered by Section 232, whether produced in China or Cambodia, exporting to the US faces the same set of (25% to 50%) steel\/aluminium tariffs; Cambodia has no separate tariff advantage, and RCEP cumulative origin cannot avoid it. So hardware companies must not treat “move to Cambodia and enjoy low-tariff US access” as a general rule \u2014 they must first confirm, item by item by HS code, whether their products fall within Section 232’s scope.<\/p>\n\n\n\n

As for non-steel\/aluminium hardware items (such as some non-metal materials, or finished goods not on the Section 232 list), their US-bound tariffs follow a separate set of rules that is also in flux: the reciprocal tariff the US originally imposed on Cambodia (19%) was ruled invalid by the Supreme Court on 20 February 2026 and stopped from 24 February, replaced by a provisional Section 122 tariff (about 10%, added on top of the MFN rate); but that measure has also been challenged in court, is under appeal, and will expire in late July 2026.

In addition, in March 2026 the US launched a Section 301 investigation into 16 economies including Cambodia, and the market expects that higher country-specific rates could land after July. In short, even the US-bound tax burden on non-steel\/aluminium hardware can hardly be called “stable, low tariffs” at present.<\/p>\n\n\n\n

On the whole, Cambodia’s tariff value for hardware is better reflected in “non-US markets” and “risk diversification”: exports to the EU can use EBA, exports to RCEP markets such as Japan, South Korea and China can use cumulative rules of origin (RCEP\/CCFTA); and it can serve as a base for diversifying single-origin and geopolitical risk. In short, Cambodia’s value for hardware lies in “non-US markets + cost + risk diversification,” not “US-bound tariff arbitrage.”<\/p>\n\n\n\n

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Operating costs: labour, utilities and total landed cost<\/strong><\/h2>\n\n\n\n

Setting tariffs aside, Cambodia remains attractive on operating costs for hardware: labour and employer social-security burdens are clearly lower than the region’s, but the logistics cost of imported raw materials must be counted into the total landed cost.<\/strong><\/p>\n\n\n\n

Cost item (2026)<\/strong><\/td>Cambodia<\/strong><\/td>Notes<\/strong><\/td><\/tr>
General worker minimum wage<\/td>About US$210\/month<\/td>Statutory for the GFT sector; hardware and other industries mostly reference this with slight variation<\/td><\/tr>
Employer social-security burden (NSSF)<\/td>About 5.4%<\/td>Clearly lower than Vietnam’s roughly 22.5%<\/td><\/tr>
Industrial electricity price<\/td>Request the latest quote from the zone<\/td>Historically high, falling in recent years as the grid expands; power-intensive processes like stamping and casting need careful modelling<\/td><\/tr>
Metal raw materials<\/td>Entirely imported<\/td>Must include landed costs such as sea freight, inland transport and customs clearance<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

For an industry like hardware that uses labour, consumes electricity and depends heavily on imported materials, looking at wages alone is misleading. Processes such as stamping, casting and surface treatment are relatively power-intensive, so electricity price and supply stability must be assessed carefully; the landed cost of metal raw materials (including sea freight, inland transport, customs clearance and in-transit inventory) should also be fully counted. We recommend always evaluating on a “total landed cost” basis, requesting the latest industrial electricity price and support-service quotes from the zone, and then comparing with your existing production base.<\/p>\n\n\n\n

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Decision framework: which hardware companies suit Cambodia<\/strong><\/h2>\n\n\n\n

Whether setting up a hardware factory in Southeast Asia should mean choosing Cambodia depends not on “whether Cambodia is good,” but on whether your own product’s tariff profile and market structure match Cambodia’s strengths.<\/strong><\/p>\n\n\n\n

Cambodia tends to be a good fit in the following cases:<\/strong><\/p>\n\n\n\n