Desk Report,
Garment sector in the face of tariff storm, what should we do?
On July 8, 2025, the US government announced a 35 percent tariff on Bangladeshi garment exports, creating an unprecedented crisis in the country’s economy.
Garment sector in the face of tariff storm, what should we do?
If this tariff comes into effect from August 1, Bangladesh will face a huge competitive disadvantage in one of its main export markets. However, timely and effective diplomatic initiatives from the government to prevent this crisis were not visible.
The country’s ready-made garment industry—which provides employment to about 4 million working people, especially women workers—is now in a deep state of uncertainty.
Currently, Vietnam, Bangladesh’s main competitor, has already reduced its tariff rate to 20 percent through negotiations with the US.
On the other hand, the 35 percent tariff imposed on Bangladesh (which, when added to the previous 15 percent, means an effective tariff of up to 50 percent) will seriously weaken the country’s competitive position.
If this tariff is imposed only on Bangladesh, US buyers will naturally turn to Vietnam or other alternative producers.
Because, decisions are made on the basis of market value. Therefore, reducing tariffs to bring them on par with competitors should now be an urgent political priority.
This crisis is further complicated by an important reality—the clothing that Bangladesh exports to the United States is owned by American companies.
In the United States, each plain cotton T-shirt is imported from Bangladesh for an average of less than $2, while the same product is sold in the country’s retail market for $14 to $30.
In other words, each product has a value added of $12 to $28 by American companies, which helps maintain American employment. More than one million Americans currently work in retail establishments in the apparel sector alone.
Imposing tariffs without taking this reality into account will also have a negative impact on the United States’ own economy.
On July 8, 2025, the US government announced a 35 percent tariff on Bangladeshi garment exports, creating an unprecedented crisis in the country’s economy.
If this tariff comes into effect from August 1, Bangladesh will face a huge competitive disadvantage in one of its main export markets. However, timely and effective diplomatic initiatives from the government to prevent this crisis were not visible.
The country’s ready-made garment industry—which provides employment to about 4 million working people, especially women workers—is now in a deep state of uncertainty.
Currently, Vietnam, Bangladesh’s main competitor, has already reduced its tariff rate to 20 percent through negotiations with the US.
On the other hand, the 35 percent tariff imposed on Bangladesh (which, when added to the previous 15 percent, means an effective tariff of up to 50 percent) will seriously weaken the country’s competitive position.
If this tariff is imposed only on Bangladesh, US buyers will naturally turn to Vietnam or other alternative producers.
Because, decisions are made on the basis of market value. Therefore, reducing tariffs to bring them on par with competitors should now be an urgent political priority.
This crisis is further complicated by an important reality—the clothing that Bangladesh exports to the United States is owned by American companies.
In the United States, each plain cotton T-shirt is imported from Bangladesh for an average of less than $2, while the same product is sold in the country’s retail market for $14 to $30.
In other words, each product has a value added of $12 to $28 by American companies, which helps maintain American employment. More than one million Americans currently work in retail establishments in the apparel sector alone.
Imposing tariffs without taking this reality into account will also have a negative impact on the United States’ own economy.
