Trump tariff shock stings Bangladesh, Sri Lanka garment giants, may help India

Ruma Paul, Uditha Jayasinghe and Dhwani Pandya

Thu, Apr 3, 2025, 5:01 AM 3 min read

By Ruma Paul, Uditha Jayasinghe and Dhwani Pandya

DHAKA/COLOMBO/MUMBAI (Reuters) - Bangladeshi garment exporter Shahidullah Azim woke up connected Thursday to the daze of U.S. President Donald Trump slapping a 37% tariff connected his country's exports, endangering an apparel hub already reeling from home governmental upheaval.

"We knew thing was coming, but we ne'er expected it to beryllium this drastic ... This is unspeakable for our concern and for thousands of workers," said Azim, whose clients see North American and European retailers.

Suppliers successful Bangladesh's garment industry, which counts Gap Inc and Vans genitor VF Corp arsenic clients, told Reuters they began seeking authorities enactment hours aft Trump's lightning bolt.

Some companies successful the impoverished South Asian state are pressing authorities officials to negociate further connected tariffs with the U.S. to forestall overseas buyers bolting to prevention costs.

The readymade garments manufacture is of existential value to Bangladesh's economy, accounting for much than 80% of full export earnings, employing 4 cardinal radical and contributing astir 10% to its yearly GDP.

Trump's planetary tariff barrage deals the latest and heaviest stroke to the industry.

Last year, garment accumulation was disrupted by convulsive protests that ousted Prime Minister Sheikh Hasina successful August, casting uncertainty connected the semipermanent imaginable of a marketplace overmuch sought aft by Western manner brands.

Azim said his company, which employs 3,200 mill workers, was bracing for bid cancellations arsenic rising costs for buyers could spell the extremity of Bangladesh's competitory edge.

A typical of the Bangladesh Knitwear Manufacturers and Exporters Association, which supports much than 2,500 factories, told Reuters that it approached the authorities connected Thursday seeking enactment against the tariff blow, and officials said the contented was being considered seriously.

Shafiqul Alam, the interim government's property secretary, said successful a connection that the United States was a "close friend" and Bangladesh's largest export destination. He said Dhaka has been moving with Washington connected commercialized matters, and expects those discussions volition "help code the tariff issue".

ADVANTAGE FOR INDIA?

Bangladesh's nonaccomplishment is neighbour India's summation successful immoderate ways.

Anwar-ul-Alam Chowdhury of garment shaper Evince fears India, which had been getting much queries from U.S. suppliers since past year's governmental situation successful Bangladesh, volition present payment adjacent much arsenic it faces a little Trump tariff of 27%.