Facing the threat of an additional 35% tariff on Bangladeshi exports, U.S. buyers have already suspended purchase orders for some products. This has created anxiety among garment factory owners. Entrepreneurs say that if the increased tariff is implemented from August 1, purchase orders may drop significantly, as manufacturers won’t be able to bear the extra costs. However, much depends on the tariff rates applicable to competing countries. Overall, exporters are waiting for a final decision. They mention that the government is negotiating with the United States, and the future of Bangladesh’s key export sector depends on the outcome.
During discussions with U.S. officials, the government consulted exporters. BGMEA President Mahmud Hasan Khan Babu said yesterday that the government asked whether exporters could manage if 40% of the raw materials used in exportable goods must be sourced locally under origin rules. “We said we can handle up to 40%. That means this portion of raw materials used in garment production must be locally sourced.”
The U.S. is the single largest buyer of Bangladeshi garments. U.S. President Donald Trump has imposed additional tariffs on exports from various countries, including Bangladesh. According to BGMEA and BTMA sources, some buyers—like Walmart and Smartex—have already suspended orders.
Walmart, a major buyer of Bangladeshi garments, had placed an order with Patriot Eco Apparel Ltd. for 1 million swim shorts worth about $4 million. On Thursday, Walmart suspended this order. The products were to be supplied to Walmart by Classic Fashion, which informed Patriot Eco Apparel of the suspension via email.
Patriot Eco Apparel’s Managing Director Iqbal Hossain said that while the order has been suspended, not canceled, concerns remain. “With such high tariffs, production won’t be feasible,” he said.
ATS Apparel Ltd., another significant exporter to the U.S., may also be affected. Managing Director Abdus Salam said that the sector could suffer losses if tariffs are raised, but it depends on what decisions are taken regarding competitor countries.
An official of another supplier to Walmart said they have not yet received any suspension of orders.
According to BKMEA sources, U.S. buyer Smartex has suspended a $700,000 order from Mother Color Ltd. via an email sent last Thursday. U.S. buyers have also suspended some orders from a Chattogram-based factory named Four H.
BKMEA President Mohammad Hatem told Samakal that no final decision has been made yet. Earlier, the Managing Director of Pacific Sweaters, Mohammad Rashed, told Samakal that his factory was working on an order of 60,000 T-shirts for a major U.S. brand. Following the announcement of the new tariff, the brand asked to halt production via email.
In the fiscal year 2024–25, total exports stood at about $8.7 billion, with garments accounting for 85% of total exports. Around 20–22% of garment exports are destined for the United States.
U.S. Wants a Framework Agreement with Bangladesh: Fawzul Kabir Khan
Energy and Power Adviser Fawzul Kabir Khan stated that the U.S. wants to sign a framework agreement with Bangladesh first. In recent discussions between the two countries, significant progress has been made. After that, talks on tariff and non-tariff issues will take place. He made this comment on Sunday while answering a question at a press conference organized by a committee formed to streamline trade, industry, ports, and revenue collection.
