Bangladesh’s garment exporters are feeling increased pressure as American retailers and clothing brands push their suppliers to shoulder a portion of the latest tariffs imposed by the Trump administration. The move has heightened financial strain on Bangladeshi manufacturers, who are already operating with slim profit margins.
Effective 7th August, new tariffs added to existing duties have significantly raised the cost of imports. For many apparel products, the combined tariff rate now reaches approximately 36.5%, comprising a new 20% levy alongside the previous 16.5% duty. This escalation has sparked behind-the-scenes negotiations as US buyers seek to transfer some of the cost burden onto their Bangladeshi partners rather than absorbing it themselves or passing it directly to consumers.
Industry insiders report that many US retailers are requesting Bangladeshi suppliers to reduce prices or share the tariff costs. Several exporters revealed that they are being asked to absorb roughly a quarter of the new tariffs, with some facing demands to cover up to 5%age points of the additional duties. “We have little to say and many of us have been accepting the buyers’ demand, although profit margins are squeezed to 3 to 4%,” said AK Azad, chairman of Ha-Meem Group, a major supplier to the US market.
The pressure mirrors previous negotiations following a 10% tariff introduced in April, which many manufacturers also absorbed. For some, the tariffs have pushed the total import duty on woven shirts to nearly 40%, complicating pricing strategies and profit margins. To offset rising costs, some retailers are also adjusting end consumer prices, with higher-end shirts now retailing at increased rates in the US.
Despite the challenges, exporters note a silver lining: pending work orders are now returning as buyers seek to secure production amid the tariff uncertainties. “The buyers are taking all the pending work orders after the announcement of the new tariff rate,” said Zahir.
The industry’s main trade body, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), reports no formal complaints from exporters about cost-sharing requests, suggesting these negotiations are happening directly between buyers and suppliers. Mahmud Hasan Khan, BGMEA president, indicated he is not aware of widespread issues, implying that the current trend is a result of private negotiations rather than official industry policy.
As the trade environment evolves, Bangladeshi exporters remain caught between maintaining profitable operations and sustaining long-term relationships with their American partners amid the ongoing tariff adjustments.
