The garment industries in Bangladesh and Cambodia—two of Asia’s leading apparel exporters—are reeling from the impact of steep new tariffs imposed by the United States, set to take effect on August 1 following a 90-day suspension.With tariffs rising to 35% for Bangladesh and 36% for Cambodia, unions and industry leaders warn of mass layoffs and factory closures.
These changes may push companies to relocate to countries with more favorable rates, like Vietnam, which recently struck a deal with Washington for a 20% tariff, or India and Pakistan, which are still negotiating their rates.
“The potential loss of jobs will cut income and jeopardize daily survival for thousands,” said Ath Thorn, Vice President of the Cambodian Apparel Workers’ Democratic Union, representing 80,000 workers.Bangladesh’s Garment Sector Under PressureThe United States is Bangladesh’s single largest garment export market, accounting for $7.34 billion of its $8.4 billion in total US exports in 2024.
The hike from a previous 15% tariff to 35% poses a severe threat, said economist Selim Raihan of Dhaka University.“This will increase production costs, shrink profit margins, and may force many factories to downsize or shut down altogether,” Raihan explained.Mohiuddin Rubel, former director of BGMEA and executive at Denim Expert Ltd., questioned whether Bangladesh can remain competitive if major rivals secure lower tariff rates.
Women Workers Face the Harshest ImpactIn both countries, women dominate the garment workforce—over 4 million in Bangladesh and 900,000 in Cambodia. Labor leaders warn that layoffs will have disproportionate effects on women, many of whom are primary breadwinners and have bank debts.
“If these women lose their jobs, families will face hunger, children will drop out of school, and the elderly will go without medicine,” said Yang Sophorn, President of the Cambodian Alliance of Trade Unions.“These women don’t just lose jobs—they lose everything,” she added.Call for Urgent ActionWhile Cambodia is pushing to reduce its tariffs from the April peak of 49%, union leaders say more needs to be done.
“If we don’t find a way to keep factories running and exports flowing, we’re heading for a crisis,” warned Thorn.In Bangladesh, the anxiety is compounded by uncertainty over how US trade deals with India and Pakistan will unfold. Without parity, Bangladesh’s competitive edge may erode.
