Tracking the impact of US tariffs on apparel & footwear supply chains
Key apparel-producing countries around the world are set to be impacted by new tariffs imposed by the US, including a 54% tariff on Chinese exports, a 37% tariff on Bangladesh's exports, a 44% tariff on Sri Lanka, a 49% tariff on Cambodia, and a 27% tariff on India, with fears regarding the impact this will have on suppliers, and in turn, workers.
Buyer response
The tariffs are predicted to result in a shift in orders by global buyers to other apparel-producing countries, in order to save on costs. For example, Indian exporters, who have already seen an increase in demand as brands have shifted orders from Bangladesh due to political unrest and instability, anticipate a further increase in demand due to the lower-costs in comparison to other apparel-producing countries. In countries with higher tariffs, manufacturers are already anticipating order cancellations from buyers due to the rising costs.
Manufacturers have also predicted an increased 'price squeeze' from buyers, in an attempt to lower costs. Suppliers in China have already reported this, with some major retailers including Target, Walmart and Costco having reportedly called on suppliers in China to absorb some of the costs of the tariffs.
Impact on workers
Shifts in orders from countries impacted by tariffs are anticipated to result in mass layoffs of garment workers, with suppliers, workers and unions across apparel-producing countries including Vietnam, Cambodia, Bangladesh and Lesotho expressing concerns of factory closures and job losses as a result of buyers moving orders elsewhere. In Lesotho, Nthabiseng Khalele, a garment worker, said: "... If we lose our jobs here, I’m almost certain that many of us will end up sleeping on empty stomachs.”