The global apparel industry is currently navigating a period of uncertainty, and Bangladesh’s vital ready-made garment (RMG) sector is feeling the effects. US buyers are delaying confirmation of new apparel orders for the upcoming summer season, as they await a crucial decision on reciprocal tariffs from the US government, expected in early July 2025. This “wait-and-see” approach by major retailers and brands in the United States is creating a cautious environment for Bangladeshi manufacturers. The core of the issue lies with proposed tariffs. US President Donald Trump announced plans for higher “reciprocal tariffs” on imported goods, originally set to begin in April but later put on a three-month pause until July 9. For Bangladesh, this could mean a significant increase in the cost of sending clothes to the US. While Bangladeshi apparel currently faces a 10% baseline tariff, new proposals suggest it could rise to as much as 26%, or even higher in some scenarios, making it one of the highest rates for Bangladesh’s key export market after China. Such a high tariff could notably impact the competitiveness of Bangladeshi products. Despite the current delays in order confirmations, Bangladeshi garment exporters are not standing still. Many factories are busy fulfilling existing orders, especially for the crucial Christmas season, with shipments expected to continue until early October. Leaders in the industry recognize the difficulties, yet they highlight the strength of the sector. For example, some US retailers are asking suppliers to share the burden of the additional tariffs, or even demanding discounts, which puts pressure on profit margins. This shows the need for adaptable strategies in the face of changing trade policies. Interestingly, even with these tariff uncertainties and other global challenges like the Russia-Ukraine war and inflation, Bangladesh’s garment exports to the US have continued to show positive growth. Data from January to April 2025 shows a nearly 30% year-on-year increase in apparel exports to the US, reaching almost $3 billion. This growth suggests that US retailers are also looking to diversify their sourcing, potentially shifting away from countries facing even higher tariffs, which benefits Bangladesh. Bangladeshi manufacturers and industry associations, like the BGMEA, remain hopeful that the US administration will reconsider the proposed rates for key sourcing countries. They are engaging in discussions and exploring ways to maintain their strong position in the global market. This situation highlights the dynamic nature of international trade and the continuous need for the apparel sector to be adaptable and innovative. The ability of Bangladesh’s garment industry to navigate these global trade complexities will be key to its continued success and contribution to the nation’s economy.
