"Resetting Asia’s Apparel Map With a New World Sourcing Order", 1 August 2025

Although the key apparel sourcing countries of Bangladesh, Cambodia, Sri Lanka and Thailand won a reprieve with the steep drop in the imposed tariff numbers in president Trump’s missive close to midnight on Thursday, manufacturers from the region largely reacted Friday with a cautious, “Lets wait and watch” attitude.

Thailand and Cambodia were both assigned a 19 percent tariff—down sharply from the original April rates of 46 and 47 percent, respectively—putting them on par with Indonesia’s revised rate announced in July.

Among the other countries down to 19 percent are Pakistan, Philippines and Malaysia.

Bangladesh and Sri Lanka now face 20 percent, down from the earlier 37 percent and 47 percent and now comparable to that for Vietnam’s 20 percent announced in July...

For many in countries like Bangladesh and Cambodia, there was a sense of deep relief that factory shutdowns and mass job losses might now be averted.

“We’re relieved for the time being...It would have been better if it was 15 percent, though,” Mahmud Hasan Khan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) told Sourcing Journal.

He added that buyers had begun reviving frozen orders, eager to restock ahead of the coming season...

However, he cautioned that trade-offs remain unclear. “We know what we’ve received, but due to a non-disclosure clause, we don’t yet know what we’ve given in return. While the apparel sector will benefit, it is important to know how the country itself will fare.”

According to media reports, Bangladesh is expected to buy 25 Boeing aircrafts, increase wheat imports from the U.S., and amend labor laws by reducing the threshold for workers to form unions—from 30 percent to 20 percent.

These developments have offered some reassurance following industry concerns...which indicated that U.S. fashion executives plan to increase sourcing from Indonesia, India and Cambodia over the next two years, driving by a desire to diversify and mitigate risks.

With India still facing 25 percent tariffs, down only by 1 percent from the earlier announcement of 26 percent – the rest of the region appears to be at an advantage.

Ken Loo, secretary general of Cambodia’s Textile, Apparel, Footwear and Travel Goods Association (TAFTAC), echoed regional sentiment. “We’re glad the rate has come down,” he said.

“We have no idea how this will impact buyers sourcing decisions and consumers yet. Everyone is adopting a wait-and-see approach. It is fortunate that we are all in the same ballpark. We will continue to work with the government to introduce measures that will reduce the cost of doing business and improve our competitiveness,” he added...

According to media reports Cambodia will buy Boeing 737 Max aircrafts along with eliminating import tariffs, bringing them to zero. Sun Chanthol, deputy prime minister also observed that Cambodia agreed on improving labor standards and import inspection systems and U.S. concerns over non tariff barriers.

Sri Lankan manufacturers likewise expressed relief at the 20 percent rate, with the Joint Apparel Association Forum (JAAF) stating it “preserved the competitiveness of Sri Lanka’s apparel industry in the key U.S. markets.”...

The sticking point for much of the region remains the issue of transshipment of goods, with its 40 percent levy—with much of the region intrinsically dependent on China in a variety of ways, how this point will be interpreted—and enforced—remains unclear, as do the final levy of tariffs on China which are still under discussion...