Bangladesh: Garment manufacturers see surge in orders from US buyers as Bangladesh receives lower US tariff
"More RMG buyers flock to Bangladesh after Trump tariff on China, India", 12 August 2025
What initially seemed like a heavy blow to Bangladesh's garment exporters has unexpectedly turned into a major opportunity, with many buyers -- who would previously source from China and India -- are now making initial negotiations for apparel orders.
When US President Donald Trump imposed a 35% reciprocal tariff on Bangladeshi apparel – significantly higher than the proposed rates for India and Pakistan – exporters braced for a severe setback.
However, in a dramatic last-minute revision just hours before the 1 August deadline, Washington reduced Bangladesh's tariff to 20%, while raising India's to 25%, with an additional 25% tariff scheduled for India on 27 August over its purchase of Russian oil...
Buyer queries (initial negotiation for order) are now pouring in from buyers who previously sourced from India, China, and Myanmar...
The ripple effect is extending beyond domestic firms. Chinese investors, eyeing the changing global sourcing patterns, are actively exploring Bangladesh as a new production hub...
"Our factory has seen a surge in orders, mostly from US buyers," said SM Khaled, managing director of Snowtex Group...
Khaled added that they are planning to increase factory capacity in response...
Inamul Haq Khan Bablu, managing director of Ananta Garments Limited, told The Business Standard, "We have orders lined up until December. Recently, representatives of two US buyers visited us for preliminary talks, but we couldn't take their orders due to lack of available space."
Bablu, also a senior vice-president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said, "Buyers are actively searching for factories with free capacity. Factories are expanding their capacity...
He added, "Since tariffs on China, India, and Myanmar are higher than ours, those orders will shift to Bangladesh. Buyers have limited options. Meanwhile, Vietnam and Cambodia face capacity constraints, making it tough for them to expand production."...
TBS reached out to major US buyers Walmart and Gap Inc, as well as European brand Bershka, to inquire about plans for increasing orders from Bangladesh, but no responses had been received by the time of publication...
Additionally, Chinese buying houses are exploring Free of Charge (FOC) business models with Bangladeshi garment factories. Under this arrangement, buyers supply raw materials and cover financial costs, while the factory is responsible only for manufacturing. This carries low risk for manufacturers but yields lower profit margins as only cutting and making costs are paid...
BGMEA reports that 191 factories have closed over the past two years, most of them small. At the same time, around 100 new factories have launched production. The closures include large factories employing up to 15,000 workers.
BGMEA leaders believe the improving market conditions could revive both large and small closed factories...
Despite optimism, some remain cautious. They worry that countries losing US market share will compensate by competing fiercely in Europe, potentially lowering prices and squeezing Bangladeshi exporters...