Bangladesh’s apparel exporters are under fresh pressure as US buyers increasingly ask suppliers to shoulder part of the recently imposed 20% reciprocal tariff on Bangladeshi garments.
Since August, several American retailers have requested local factories to absorb between 5% and 7% of the additional duty, while some expect suppliers to take on the entire burden. Industry insiders warn this practice risks eroding Bangladesh’s competitiveness despite its relatively lower tariff rate compared to rivals such as India and China.
Large exporters like Sparrow Group have agreed to cover a portion of the tariff to secure orders. “Out of necessity, we confirmed those orders,” said Managing Director Shovon Islam, noting that buyers are dictating prices. In contrast, HKC Apparels in Chattogram has refused, leaving many of its contracts pending. “We cannot take loss-making orders. If necessary, we may reduce capacity, but absorbing further losses is unsustainable,” said its head, Rakibul Alam Chowdhury.
Some US buyers admit to partial cost-shifting, citing thin margins. One country director of a major brand said retailers are covering more than half of the new tariff, while pressing suppliers to manage 1%–3% of the remainder. Buying houses in Dhaka also report redistributing costs down the supply chain, urging yarn, fabric, and accessories suppliers to share the pressure.
Industry leaders are pushing back. BGMEA Senior Vice President Inamul Haq Khan Bablu stressed that garment makers are already operating at break-even, urging members to negotiate firmly instead of offering hidden discounts. BKMEA President Mohammad Hatem echoed this, saying members have been instructed to factor in tariff costs during price discussions.
Despite these challenges, Bangladesh’s apparel exports to the US grew 22% in the first seven months of 2025, reaching $4.92 billion, according to US Department of Commerce data. This comes as imports from China fell 21% during the same period.
While Bangladesh’s tariff of 20% remains lower than India’s 50% and higher than Pakistan’s 19%, exporters fear that without fair cost-sharing, the country’s competitive edge may weaken. Associations are calling for stronger government and industry coordination to ensure that buyers recognize the real costs of compliance and sustainability.
