May 8, 2025 2:05 pm
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Tariffs Threaten to Undermine Gains of Bangladesh’s Garment Workers

For decades, Bangladesh’s garment industry has been the engine of its economic progress. Factories once dismissed as sweatshops have evolved into global production hubs, transforming the lives of millions—especially women—and helping lift the nation’s income above that of neighboring India. But now, the sector faces an existential threat from international politics it never anticipated: a potential trade war with the United States.

The garment factories in places like Savar, just outside Dhaka, have played a central role in reshaping Bangladesh’s economy. Nearly 85% of the country’s exports are garments, the vast majority of which go to the U.S. But a recent decision by President Donald Trump to impose a 37% tariff on Bangladeshi imports shocked the nation. Though the measure was temporarily paused following global backlash, the uncertainty has rattled workers and factory owners alike.

Uncertainty in the Air

At the 4A Yarn Dyeing factory in Savar, Murshida Akhtar, 25, recently started a new job. Like many of the factory’s 200 new hires—70% of them women—she hoped for a better wage and a more comfortable commute. But the looming threat of reduced orders is hard to ignore.

“My worry is that orders will be reduced,” Akhtar said. “Then there is less work.”

For workers like her—part of the roughly four million employed in the garment sector—the consequences of a tariff resurgence could be devastating. Families across the country depend on the wages from this industry to survive.

The Cost of Protectionism

The proposed U.S. tariff, combined with existing global trade barriers, threatens to disrupt Bangladesh’s most critical economic lifeline. Even the 10% base tariff, still in place despite the temporary suspension of the higher rate, is a heavy blow in an industry known for razor-thin margins.

President Trump’s policy follows a broader protectionist approach, including steep tariffs on China. In response, Nobel Peace Prize laureate and interim Bangladeshi leader Muhammad Yunus appealed directly to the White House, offering to increase imports of American goods—particularly cotton—in an effort to ease trade tensions. But many in Bangladesh see the move as a coercive tactic that exploits the country’s political instability.

Rashed Al Mahmud Titumir, an economist at the University of Dhaka, condemned the tariffs as “an ugly display of power,” pointing out that they come at a time when Bangladesh is still reeling from economic and political turmoil.

A Sector Transformed

The threat is especially painful given the progress the industry has made. Since the 2013 collapse of Rana Plaza—a tragedy that killed more than 1,100 workers and shocked the world—Bangladesh’s garment industry has undergone a dramatic transformation.

Factories have consolidated and modernized, with a strong emphasis on worker safety, environmental sustainability, and transparency. Today, Bangladesh is home to more factories certified under the U.S.-led Leadership in Energy and Environmental Design (LEED) program than any other country.

4A Yarn Dyeing, where Akhtar works, is one such facility. Though the name suggests textile production, the factory now focuses on high-value outerwear for global brands like Carhartt, Calvin Klein, and Costco’s Jachs New York. Solar panels on the roof help power the building, English signage guides the workflow, and the facility is designed to impress visiting international inspectors.

Even amid political unrest—including violent uprisings that led to the ousting of long-time Prime Minister Sheikh Hasina last year—factories like 4A have remained resilient. General manager Khandker Imam recalled how employees defended the facility from angry mobs, determined to keep operations running.

A Fragile Future

Despite the resilience, the garment industry’s future is deeply uncertain. The World Bank has already revised down Bangladesh’s growth projections for the next two years, citing the combined pressures of global tariffs, reduced exports, and IMF-imposed austerity measures.

“We are under tremendous pressure from the I.M.F. to reduce subsidies and hike fuel prices,” said Fahmida Khatun, director of the Center for Policy Dialogue in Dhaka.

At the heart of the storm is a contradiction: a country that has done much to clean up its manufacturing sector and elevate its workforce is now being punished by the very markets it has helped supply.

Mohammad Monower Hossain, head of sustainability at 4A Yarn Dyeing, put it plainly: “The whole economy of this country depends on this sector.” Bangladesh’s biggest resource isn’t oil or minerals—it’s its people.

And right now, that human engine of growth faces a peril it can’t control.

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