US brands show less interest in BD, Vietnam

US brands and retailers are diversifying their sourcing from China to other Asian suppliers, but traditional alternatives like Bangladesh and Vietnam had not seen increased interest during the first quarter of this year.

Despite tariff pressure, they are yet to significantly cut their China sourcing, according to a latest report of Quality Inspection Management (QIMA), a leading supply-chain compliance-solutions provider.

Inspection and audit demand-related data released in the report shows a flat year-on-year trend.

However, the US brands and retailers are increasingly diverting additional order volumes to other supplying hubs in Asia, as part of the ongoing long-term shift away from China.

"Notably, traditional alternatives to China, such as Vietnam and Bangladesh, have not seen increased interest this quarter, with inspection and audit demand stagnating year-on-year in both," says the report.

Explaining the reason, the report mentioned that in Vietnam, the anticipation of Trump's reciprocal tariffs may have contributed to the decreased interest, while Bangladesh's manufacturing focus on cotton garments may be limiting some buyers' options.

The US brands and retailers are exploring newer sourcing markets in Southeast Asia such as Cambodia (36 per cent YoY), the Philippines (62 per cent), and particularly Indonesia, where demand for inspections and audits from US businesses has been booming for three consecutive quarters, more than doubling in Q1, 2025, according to the report.

Overall, US demand for inspections and audits in Southeast Asia expanded 55 per cent so far in 2025, with the region accounting for over one-quarter of all US sourcing in the first quarter.

The report, however, said that the impact of the latest round of tariffs, with Vietnam and Cambodia among the hardest hit, may alter this trend in the coming months.

In Q1, global trade has maintained a degree of resilience, but supply challenges are mounting as US trade policies remain heavy-handed and unpredictable, it said.

The new wave of sledgehammer-style US tariffs announced in early April sends global supply chains into uncharted waters, the report noted.

When asked, Mahmud Hasan Khan, a former leader of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said orders from Bangladesh might not decrease significantly as the country mostly produces basic garment items.

However, India followed by Pakistan and Indonesia, with their strong backward linkage industry, could be major competitors for Bangladesh in grabbing the work orders diverted from China amid the trade and tariff war between the US and China.

India and Pakistan have strong backward linkage industries with their own cotton and yarn while India and Indonesia are also strong in manmade fibre that could offer value added items, said Mr Khan, who is also managing director of Rising Group, explaining that they could be a better choice for the US brands than Bangladesh.

Bangladesh fetched US$1.50 billion from the US market during the January-February period of 2025, marking 26.64 per cent growth from $1.18 billion in the corresponding period of 2024, according to the data by OTEXA, an affiliate of the US Department of Commerce.

US apparel imports from China and Vietnam recorded 8.85 per cent and 11.14 per cent growth to reach US$2.77 billion and US$2.62 billion respectively during the period.

India, Indonesia and Pakistan recorded 25.70 per cent, 18.27 per cent and 23.05 per cent growth respectively, according to OTEXA data.

The rise in exports from countries like Indonesia, India, Pakistan, and Cambodia in 2025 indicates that US buyers are diversifying their sourcing, influenced by competitive costs and geopolitical considerations.

On the other hand, China's slower growth, which economists and exporters apprehend would further shrink, indicates shifting dynamics in global sourcing patterns, while factors such as trade policies, production costs, and sustainability requirements continue to shape these trends.

Exporters said Bangladesh needs to address its internal issues, including energy crisis, high cost of production, high bank interest rate, and other complexities, to sustain its competitiveness amid the possible volatility in the global trade landscape.

Munni_fe@yahoo.com