U.S. Tariffs Force Buyers to Halt Orders from Bangladesh’s Garment Industry
DHAKA – Bangladesh’s $35 billion garment industry, the world’s second-largest, is facing an immediate crisis as U.S. buyers suspend orders following President Donald Trump’s new 37% tariffs on Bangladeshi cotton products—a steep jump from the previous 16% duty.
Key Developments:
- Buyers Freeze Shipments:
- Mohammad Mushfiqur Rahman (MD, Essensor Footwear & Leather) said a long-term U.S. client halted a $300,000 shipment of leather goods (bags, belts, wallets).
- AKM Saifur Rahman (CEO, Wikitex-BD) reported a $150,000 order suspension, with buyers citing tariff uncertainty.
- Economic Blow:
- 7.34BofBangladesh’s8.4B U.S. exports come from ready-made garments (RMG)—a sector still recovering from 2023’s political unrest.
- Monthly exports to the U.S. (avg. $700M) now at risk, threatening 4M+ jobs in the industry.
Why the Tariffs?
- Trump’s broader trade war includes hikes on EU, China, and now Bangladesh, aiming to “protect U.S. manufacturing.”
- Bangladesh’s low-wage garment sector (avg. $120/month) has long relied on duty-free access to Western markets.
Industry Reaction:
- Faruque Hassan (BGMEA President): “This is catastrophic. We urge the U.S. to reconsider—Bangladesh is not a trade threat.”
- Mohammad Hatem (BKMEA VP): “If orders drop 30%, factories will shut. Workers will starve.”
What’s Next?
- Emergency Talks: Bangladesh govt. plans diplomatic outreach to Washington.
- Diversification Push: Manufacturers may pivot to EU, Japan markets, but retooling supply chains takes time.
- Labor Unrest Risk: Wage cuts or layoffs could reignite protests like those that toppled the govt. in 2023.
Stat of Concern:
- 81% of Bangladesh’s export earnings come from apparel—the highest dependency globally.
Bottom Line:
The tariffs could undo a decade of growth in Bangladesh’s garment sector, destabilizing its economy and amplifying global trade tensions. With no quick fix in sight, the industry faces its biggest test since the Rana Plaza disaster (2013).
