A new survey supported by the ILO and IFC finds that Bangladesh’s garment factories with heavy exposure to the US market are already experiencing stress following heightened US tariff uncertainty, while those more tied to the EU market are showing comparatively better resilience.
Better Work Bangladesh (BWB) report, “Assessing the early impacts of tariff uncertainty on the garment sector in Bangladesh,” reveals that although overall production in Q1 2025 remained broadly stable, the impact varied sharply by market:
• US-linked factories were 14 % points less likely to report increased production.
• EU-linked factories were 16 % points more likely to see higher output.
The findings underscore Bangladesh’s high market concentration, with the EU and US accounting for the bulk of apparel exports—now producing mixed effects amid tariff disruptions.
Despite these pressures, the sector shows underlying resilience:
• 64% of factories have 3–6 months of confirmed orders, while 30% have contracts extending beyond six months.
• 53% say they can sustain operations for at least three months with existing orders and raw materials.
• 92% report no buyer discontinuation so far in 2025.
Risks, however, remain. The survey flags early warning signs such as potential worker retrenchment and shorter-order pipelines that could deepen vulnerabilities if shocks persist.
