Motaher Hossain

Bangladesh’s ready-made garment (RMG) sector—accounting for more than 80% of the country’s export earnings—is once again at the crossroads. Recently, the United States administration announced a sudden and steep increase in tariffs on Bangladeshi apparel, raising duties from 15% to 37%. This unexpected move has sparked serious concerns across the industry, as it directly threatens Bangladesh’s largest export market and may cause a domino effect across the broader economy. This policy shift, if implemented without negotiated adjustments, may significantly reduce
U.S.-bound apparel exports, resulting in falling foreign exchange reserves, shrinking employment opportunities, and loss of buyer confidence. In a country where millions depend on the garment sector, such developments are nothing short of alarming. Over the last decade, trade between Bangladesh and the United States has heavily tilted in
Bangladesh’s favor. In 2024, Bangladesh exported goods worth $8.36 billion to the U.S., while importing only $2.21 billion, resulting in a trade surplus of $6.15 billion. Nearly 18% of all Bangladeshi garment exports are destined for the U.S. market, making it the single largest destination.Yet, Bangladeshi goods continue to face an average tariff of 15%, the highest among all Least Developed Countries (LDCs). Unlike competitors like Vietnam, who benefit from
bilateral trade agreements, Bangladesh lacks such preferential access. The recent tariff hike compounds this structural disadvantage, putting Bangladesh at a greater risk of losing its competitive edge.Despite a modest 0.73% increase in apparel exports to the U.S. in 2024 (reaching $7.34billion), earnings did not grow proportionately. One major reason: American buyers have aggressively negotiated price reductions, slashing garment prices by 3.8% to 7.7%. While
the volume of exports increased by 4.86%, profit margins remain under pressure.This pricing trend reflects a global buyer mindset that prioritizes low cost over ethical sourcing and environmental sustainability. With rising production costs at home—particularly due to energy shortages and wage pressures—Bangladesh’s garment manufacturers are caught between shrinking returns and rising risks.Internally, Bangladesh’s industrial base is also facing critical infrastructural challenges. The garment sector is highly dependent on uninterrupted gas and electricity supply. However, gas shortages have become chronic, with industries receiving 30% less gas than they need.In February 2025, export purchase orders (UDs) fell by 42%, the sharpest decline in over a year. This unexpected plunge has rattled industry leaders and raised concerns about the long- term viability of production lines and workforce retention. Following the political transition in August 2024, Bangladesh experienced widespread labor unrest, particularly in garment hubs around Dhaka. Workers took to the streets demanding better wages and working conditions, resulting in violent protests, factory closures, and canceled export orders. These disruptions extended into October, further destabilizing the industry. This period of unrest, coupled with a perceived deterioration in law and order, created a
perception of risk among international buyers—many of whom began diverting orders to countries like Vietnam, India, and Cambodia. The instability also emboldened competitors to court buyers away from Bangladesh.In 2024 alone, 140 textile and knitwear factories were forced to shut down due to financial losses, production disruption, and order cancellations. This led to the unemployment of over94,000 garment workers. With each closure, Bangladesh loses not only jobs but also decades of goodwill and business relationships built with global buyers. The cumulative effect of energy shortages, labor unrest, and rising trade barriers is pushing the RMG sector to the edge. Experts warn that without immediate intervention, the industry could face long-term erosion of its market share. Bangladesh’s rise as the world’s second-largest apparel exporter, after China, has not gone unnoticed. Countries like Vietnam, India, Pakistan, Myanmar, and Sri Lanka view Bangladesh as a competitor and have been quick to exploit moments of internal crisis. Industry leaders have long warned about “foreign-backed conspiracies” aimed at destabilizing Bangladesh’s garment sector. By fueling worker unrest and spreading negative perceptions abroad, these groups hope to seize Bangladesh’s share in the global apparel market.Despite these challenges, Bangladesh has earned global praise for its green factory movement. According to BGMEA, there are 218 LEED-certified green factories in the RMG and textile sector. Among these, 84 hold Platinum certification, 120 Gold, and the rest Silveror Certified levels. Impressively, 56 of the world’s top 100 green garment factories are now located in Bangladesh. This leadership in sustainability has made “Made in Bangladesh” a sought-after label among global fashion brands. Maintaining this image is crucial for the sector’s future competitiveness. To navigate this storm, Bangladesh must undertake immediate and long-term strategic actions: The government must continue dialogue with the U.S. administration to negotiate a rollback of the new 37% tariff to the previous 15%. Utilizing international goodwill, including the global influence of Nobel Laureate Dr. Muhammad Yunus, can be crucial to restoring GSP (Generalized System of Preferences) access.Political stability, industrial peace, and law enforcement are prerequisites for retaining buyer confidence. Efforts must be made to prevent labor unrest and address workers’ legitimate concerns through fair wages and safety measures.Investments in energy infrastructure are urgently needed. Diversifying energy sources, increasing LNG imports, and improving electricity distribution would help reduce production disruptions. Bangladesh must move beyond basic garments and invest in product diversification, design innovation, and technical textiles to attract higher-end buyers and achieve better margins.The “Green Factory” advantage should be leveraged in branding campaigns. More partnerships with eco-conscious brands and emphasis on sustainability can differentiate Bangladesh in a price-sensitive global market. Factories must create worker-friendly environments to reduce turnover and increase productivity. Training, healthcare, and upskilling initiatives can go a long way in boosting morale and retaining talent. Bangladesh’s garment industry is not just a sector—it is the backbone of the economy, the source of income for millions, and a symbol of national resilience. Over four decades, it hasbuilt a global reputation through quality, affordability, and adaptability. But reputation alone is not enough to survive a new era of geopolitical shifts, economic uncertainty, and environmental expectations.Only through strategic diplomacy, industrial modernization, and united national efforts can Bangladesh sustain and expand its hard-earned position in the global apparel trade. The road ahead is challenging, but not impossible—if stakeholders act wisely, urgently, and together.
The wirter is a  journalist,  general secretary – Bangladesh Climate Change Journalists Forum