‘Orders plummet 4% even before US tariffs hit’

August 1, 2025, is not just a date on the calendar for Bangladesh’s ready-made garment (RMG) industry it is a deadline. A red line. A potential point of no return.

On that day, the Trump administration’s 35 per cent counter-tariff on Bangladeshi goods is set to take effect. And long before the first customs invoice is stamped, the damage has already begun.

Order flow from US buyers has dropped by 4 per cent in the next quarter compared to the last, according to SMM Khaled, Managing Director of Snotex Group, one of Bangladesh’s leading garment exporters.

“This is not speculation. This is happening now,” Khaled told Jago News in a candid, exclusive interview. “In the past three months, 27 per cent of our total orders came from the US. For the next three months, that has dropped to 23 per cent. That’s a 4 per cent decline – purely due to the announcement of the tariff. Buyers are already shifting. The crisis has started before the tariff even hits.”

A looming trade shock

The US is Bangladesh’s second-largest apparel market, after the EU, accounting for nearly $8 billion in annual exports. The proposed 35 per cent tariff, far above the current average of 0-5 per cent, is not just a tax hike. It is a competitive earthquake.

Until now, Bangladesh competed on cost efficiency, especially labour. While countries like Vietnam, India, and Cambodia offered similar pricing, Bangladesh held its ground due to lower wages and a growing reputation for reliability.

But this new tariff changes everything.

“If this tariff is implemented, we will no longer be competitive,” Khaled warns. “We will be priced out overnight.”

Why Bangladesh will lose fast

Firstly for lead time disadvantage. It takes 40 days to ship garments from Bangladesh to the US. In contrast, China and Vietnam deliver in 20-25 days. In a fast-fashion world, speed is everything.

Secondly the weak backward linkages. Bangladesh still imports over 70 per cent of its fabrics and accessories. Without strong domestic textile infrastructure, the industry remains vulnerable to price shocks and delays.

And the third cause is technology gap. While competitors have automated cutting, sewing, and inventory systems, most Bangladeshi factories still rely on manual processes. This inefficiency becomes a liability when every dollar counts.

“The additional 35 per cent tariff will be passed on to the buyer,” Khaled explains. “And when a buyer sees that Bangladesh is suddenly 30-40 per cent more expensive than Vietnam or Mexico, they will switch. It’s not personal. It’s business.”

The human cost: 4 million jobs at risk

The RMG sector employs over 4 million workers, 60 per cent of them women. It contributes over 12 per cent of GDP and earns 80 per cent of the country’s total export revenue.

A sustained drop in US orders could trigger a domino effect: Factories scaling down or closing; layoffs in the hundreds of thousands; collapse of ancillary industries such as textiles, packaging, logistics; and a sharp decline in foreign exchange reserves.

“If just 1-2 per cent of US orders shift permanently to Vietnam, India, or Cambodia, the impact will be catastrophic,” Khaled says. “We’re not talking about margins anymore. We’re talking about survival.”

The way forward: Three lifelines

To avert disaster, Khaled outlines a three-pronged emergency strategy:

Diplomatic offensive 

“The government must launch immediate, high-level negotiations with the US. Send a trade delegation. Engage Congress. Explain how this tariff will devastate not just Bangladesh, but also American brands that rely on our factories. This is not a Bangladesh problem – it’s a global supply chain crisis.”

Boost efficiency and technology 

“Invest in automation, digital inventory, and smart factories. Reduce production time and waste. Even a 10 per cent improvement in efficiency can offset some of the tariff impact.”

Incentivise high-value production 

“Shift from basic T-shirts to technical wear, sustainable fashion, and branded apparel. Offer subsidies for R&D, design, and eco-friendly production. Move up the value chain –because competing on price alone is no longer an option.”

A narrow window of opportunity

There is still hope – but only if action is swift.

“If the US tariff can be brought down to match Vietnam or India, 5 per cent or less, Bangladesh can survive. We have the workforce, the experience, the infrastructure. But time is running out.”

With only days before August 1, the clock is ticking.

“This is not just about trade,” Khaled says, his voice heavy. “It’s about the livelihoods of millions. If the government doesn’t act now, with urgency and visibility, the foundation of Bangladesh’s largest export sector will crack. And once it breaks, it may never be repaired.”