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.
28 September, 2025, 07:25 am
Last modified: 28 September, 2025, 07:36 am
Ther is a chance that buyers will consider this increased tariff while negotiating prices with the Bangladeshi apparel manufacturers. Photo: TBS
Highlights:
* US imposes 20% reciprocal tariff on Bangladeshi apparel
* Buyers push suppliers to absorb part of tariff costs
* Some factories accept losses; others risk losing US orders
* Industry groups urge fair price negotiations with US buyers
* Bangladesh’s apparel exports to US rise 22% despite tariffs
* Competitive edge fades as cost-sharing pressures undercut tariff advantage
Exporters in Bangladesh had hoped for a competitive boost when the united States set its reciprocal tariff.
RMG Sector Faces Pressure as US Tariffs rise
Chattogram-based HKC Apparels’ managing director Rakibul Alam Chowdhury has refused to absorb additional costs stemming from increased US tariffs,resulting in unconfirmed orders. “Our profits are minimal, sometimes at break-even,” said Rakibul, who employs 6,500 workers and exports over 90% of his products to the US. “we cannot take loss-making orders. If necessary, we may reduce factory size, but further losses are unsustainable.” He explained that buyers are expecting suppliers to manage the increased costs, a pressure he is unwilling to accept, leading to order cancellations.
Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), confirmed that some buyers are requesting suppliers share the burden of the tariffs, while others are maintaining their original pricing. He noted that one company within the association negotiated an agreement to cover a portion of the increased costs.
However, abdullah Hil Nakib of Team Group reported that his company’s buyers are accepting the higher prices without requesting discounts.
Bangladesh’s ability to fully benefit from the US tariffs hinges on a strategic response from both the government and exporters.
Buyers admit shifting part of cost
Some representatives from US brands have admitted to requesting partial cost-sharing from suppliers. A country director of a major US brand stated that retailers are covering more than half of the increased tariff, but margins are already tight. Suppliers are being asked to absorb between 1% and 3% of the cost, with the remainder likely to be passed on to US consumers.
A senior officer at a Dhaka buying house, whose clientele is almost entirely US-based, explained that buyers have agreed to cover half of the new tariff, requesting suppliers manage the other half. The buying house is absorbing some of the pressure and asking fabric, yarn, and accessory providers to share the burden to secure orders.
Bangladesh’s Garment Exports to US Rise Despite New Tariffs
Bangladeshi garment exports to the United States have increased despite the implementation of new reciprocal tariffs, according to recent data. While the tariff rate is lower than those imposed on some competitors, exporters are awaiting a larger surge in orders.
The US initially announced a 35% additional tariff on Bangladeshi goods in April to address its trade deficit, temporarily applying a 10% duty on all countries during negotiations. A final reciprocal tariff of 20% was set for Bangladesh in August, compared to 25% on India (later raised to 50%), 20% on Vietnam, 19% on Pakistan, and higher rates on China. https://www.tbsnews.net/economy/rmg/bangladeshs-garment-exports-us-rise-despite-new-tariffs-472999
Previously, Bangladeshi garments entered the US market with a duty of around 16.5%. the new 20% reciprocal tariff brings the effective rate to 36.5%.despite this increase, data from the US Department of Commerce shows apparel imports reached $45.8 billion between January and July,a 5% year-on-year increase.During the same period, Bangladesh’s shipments to the US rose 22% to $4.92 billion, while imports from China decreased by 21%. https://www.tbsnews.net/economy/rmg/bangladeshs-garment-exports-us-rise-despite-new-tariffs-472999
Bangladesh is now among the top apparel suppliers to the US, alongside Vietnam, China, India, Indonesia, and Cambodia. Key US buyers of Bangladeshi garments include Walmart, VF Corporation, Levi Strauss, Target, fruit of the Loom, Gap Inc., Tapestry, and PVH.https://www.tbsnews.net/economy/rmg/bangladeshs-garment-exports-us-rise-despite-new-tariffs-472999