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Looming uncertainty and fears of price pressure under the new US tariff regimes have prompted many local apparel suppliers to shift their focus toward alternative markets, such as the European Union (EU) and other non-traditional destinations.
Industry insiders said they are still in the dark about what will happen after July 9, when the 90-day pause on the Trump administration's proposed tariff hike expires.
Many suppliers are struggling to communicate with their US buyers, most of whom are placing orders "cautiously and slowly" due to the prevailing uncertainty.
Some suppliers have already started utilising their production capacity to cater to other markets, primarily in the EU.
Talking to the FE, Sayeed Ahmad Chowdhury, Director of Operations at Square Denim, said they have already diverted a portion of their production capacity to EU buyers, largely because of the uncertainty in the US market following the new tariff rates.
"We have recently started working with an EU buyer -- Inditex -- which maintains a steady flow of work orders throughout the year, with fewer lean periods and better pricing," he said.
"If the proposed 37 percent tariff takes effect after July 9, it will deliver another significant blow in terms of pricing," he added.
Always, there remains a price pressure from US market while suppliers are forced to bear half of the 10 per cent tariffs burden, he said, adding that this situation is uncomfortable for suppliers.
If the proposed 37 per cent tariff takes effect after July 9, it will deliver another significant blow in terms of pricing, he added.
A good number of US buyers have put on hold conformation of a certain portion of their fresh orders, as both buyers and suppliers are unaware of the possible rates and the possible tariff regime, he noted.
Mohammed Sohel, Managing Director of Bangla Poshak, said they are also facing pressure from the EU as many old companies have either shut down or changed ownership, resulting in a downtrend of sales there.
In such a situation, many local suppliers are planning to switch over to other markets such as non-traditional ones, he added.
When asked, Khan Monirul Alam Shuvo, Managing Director of Fashion.Com, said one of his two factories produces manmade fibre-based garments, mainly for US buyers.
He received a plenty of work orders during January-March period and the volume of orders was comparatively less during July-August period as many buyers might have refrained from placing fresh orders due to uncertainty over new US tariff structure.
Mr Shuvo said the situation remains the same for big suppliers who are heavily dependent on the single largest destination.
"But it is not possible to shift the entire production capacity from US to other markets overnight," he added.
"Stakeholders don't know about the possible changes; more visible efforts are needed to support continue negotiations with buyers," he said.
According to exporters, 20 to 30 per cent of the desired work orders have been put on hold or under review for confirmation by the US buyers.
AKM Saifur Rahman Farhad, Vice-President of Bangladesh Garment Buying House Association, however, said Bangladesh has huge potentials despite the ongoing challenges, including US new tariffs, adding that the trade war between US and China would continue encouraging buyers to shift from China.
The US is Bangladesh's single largest export destination. Bangladesh fetched US$7.34 billion by exporting garments to the US in 2024, out of its total shipment of apparel items worth US$38.48 billion.
On April 02 last, the US imposed increased reciprocal tariffs on various countries, including a 37 per cent tariff on Bangladesh.
Later, the Trump administration implemented additional 10 per cent duty and suspended the remaining tariffs for three months until July 09, 2025.
During this time, many countries, including Bangladesh, have been engaged in negotiations with the US to reduce the tariffs.
Vietnam, one of Bangladesh's main competitors, has already secured a reduced tariff rate of 20 per cent -- down from 46 per cent -- by lifting tariffs on US goods.
munni_fe@yahoo.com