Bangladesh: US buyers pushing garment manufacturers to absorb the cost of US tariffs, those who resist in 'limbo'
"US buyers push Bangladeshi exporters to partly absorb tariff costs", 28 September 2025
[...]
Since August, when the US imposed a 20% reciprocal tariff on Bangladeshi apparel, some buyers have sought to transfer between 5% and 7% of the added cost onto suppliers, while others want them to carry the full burden.
Those who comply can secure orders, while those who resist are left with contracts hanging in limbo, several industry representatives told The Business Standard.
Shovon Islam, managing director of Sparrow Group, said US buyers have asked his company to bear one-quarter of the new tariff, particularly for spring, summer, and fall collections.
"Out of necessity, we confirmed those orders," he said. "Buyers have made it clear they will now set prices themselves."
Sparrow...is absorbing about 5 percentage points of the tariff. A garment that previously sold for $100 now costs $120 in the US, but the factory captures only part of that increase.
Rakibul Alam Chowdhury, managing director of Chattogram-based HKC Apparels, said he has refused to shoulder the added cost, leaving many orders unconfirmed.
"Our profits are minimal, sometimes at break-even,"..."We cannot take loss-making orders. If necessary, we may reduce factory size, but further losses are unsustainable."
"They expect us to manage it. I can't take on this pressure, so orders are not being confirmed," he added.
Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), confirmed that some buyers have pressed suppliers to share the burden, while others have stood firm...
Major buyers including Walmart and two Gap Inc subsidiaries did not respond to requests for comment.
Inamul Haq Khan Bablu, senior vice president of BGMEA, said factories are producing garments at very low profit or break-even. Under these conditions, price negotiation should adjust for the new tariff.
He added that weak negotiation capacity among some factory owners gives buyers an advantage, and offering discounts risks misleading buyers about garment owners' profits...