The U.S. government has announced it is assessing whether to help finance a nearly-completed airport near the Cambodian capital, a move that comes amid growing tariff tensions between the two countries, the halting of virtually all Washington’s aid to Phnom Penh and only weeks after Chinese President Xi Jinping visited the Southeast Asian nation.

The U.S. State Department’s International Development Finance Corporation (DFC), started by President Donald Trump in his first term to finance private sector projects, this week released an environmental and social impact assessment (ESIA) for the Techo Takhmao International Airport in Kandal province, 20 kilometers south of the Cambodian capital.

The documents, which are open for public comment until July 12, do not specify the size of the proposed support, terms of the financing or what the money will be for except that it is for the first phase of the project. But the Cambodian government has said the first phase of the airport, which will have an annual capacity of 13 million passengers, will open on July 10 if the final tests and audits are passed.

Phnom Penh’s current international airport handled 4.75 million passengers last year, close to its capacity of 5 million, according to its operator. It will close the day before the new facility opens.

The Techo Takhmao International Airport is being developed as a joint venture between the Cambodian government, which owns 10%, and the Overseas Cambodian Investment Corporation (OCIC), a conglomerate run by influential tycoon Pung Kheav Se who is close to former Prime Minister Hun Sen, which owns the rest. 

In 2017 it was announced that the first phase of the airport would cost $1.1 billion. But there have been no announcements on how much has been spent, although local media have put the figure at more than $1.5 billion. 

The project has faced financial headwinds after the Bank of China reneged on an agreement in 2019 to finance it. The Cambodian government then promoted bonds — offering 5.5% per annum with a three-year tenor — floated by OCIC in 2021 and 2022 to fund construction. These bonds were largely purchased by local banks, insurance companies and financial institutions, netting more than $300 million. 

DFC confirmed it was conducting due diligence on the airport project, adding that its support was conditional on compliance with the performance standards of the International Finance Corporation, part of the World Bank Group, including on the resettlement of people.

Sin Chansereyvutha, spokesperson for Cambodia’s State Secretariat of Civil Aviation, said he could not comment because discussions with DFC were ongoing. “The DFC is working on it. We are waiting for the result,” he said. OCIC did not respond to requests for comment. 

The developers have said they want to complete the second phase, which will include a second runway and expand the passenger capacity to 30 million, by 2030. No estimated budget for this expansion has been announced.

“The United States is definitely trying to counter China’s influence in Cambodia particularly after China became involved in upgrading Cambodia’s Ream Naval Base,” said Carlyle Thayer, professor emeritus at the University of New South Wales and a Southeast Asia expert.

If the U.S. were to finance the new airport, Thayer added, it would mark a change in Washington’s approach toward Cambodia.

In recent years, the U.S. has focused on countering China’s growing influence in Cambodia, especially Beijing’s financing of upgrades at the Ream Naval Base. The U.S. claims the Chinese military will have exclusive access to the facility, an allegation that has some teeth following Cambodia’s announcement of a joint logistic center with China at Ream.

A U.S. Defense Department report from 2021 said that Cambodia rejected a U.S. offer to renovate two U.S.-funded facilities at Ream, another apparent attempt by the U.S. to counter Chinese investment in Cambodia.

The possibility of DFC financing for the airport comes amid a slew of seemingly antagonistic Trump administration policies against Cambodia. 

The Southeast Asian nation was among nations hit hardest by Trump’s “reciprocal” tariffs announced in April, with a proposed rate of 49%. Trump claimed Cambodia was “making a fortune” off of the U.S.

While these tariffs have been put on hold till July, pending negotiations, the Trump administration placed 3,500% tariffs on solar exports from Cambodia later in April. The country is also on a supposed immigration “yellow list” that requires it to meet certain unspecified requirements or else risk its citizens facing a U.S. travel ban.

Allegations of human rights violations have also plagued the Techo Takhmao International Airport project. The U.S. State Department’s annual human rights report for 2021 and 2022 flagged people being forcibly removed from their land around the airport, and alleged that Kheave Se’s company was clearing residents’ farmland and offering below market rates for their property.

The DFC’s ESIA report highlights “major impacts” during land acquisition for the project and to livelihoods of residents living around the airport, requiring confirmation that people were given “final and fair” compensation and the establishment of livelihood restoration programs, among other recommendations.

Naly Pilorge, outreach director for the Cambodian League for the Promotion and Defense of Human Rights, said the report raised a “staggering” number of violations of international standards linked to the project.