New US tariff put footwear exports at risk
Business Report :
Bangladesh’s fast-growing non-leather footwear sector is facing a serious setback as new tariffs imposed by the United States threaten to derail its export momentum and undermine its global competitiveness.
The sector, which has more than doubled its export earnings over the past seven years-from US$244 million in FY2017-18 to US$523 million in FY2024-25-has benefited from rising global demand for synthetic footwear known for comfort, style, and affordability.
However, effective from 1 August, the US government has imposed a sharp 50 per cent tariff on synthetic shoe imports from Bangladesh, adding a new 35 per cent duty on top of an existing 15 per cent. Industry stakeholders warn that the move could erode Bangladesh’s price advantage in the US market, potentially reversing its recent gains. Vietnam, which faces a comparatively lower 20 per cent duty, stands to benefit from this shift.
Riad Mahmud, Managing Director of Shoeniverse Footwear, said that around 95 per cent of his US-bound orders have been temporarily postponed due to the tariff increase. His factory in Mymensingh, which employs 4,700 workers, is now facing uncertainty in cash flow and workforce stability.
The rise of Bangladesh’s non-leather footwear sector has been fuelled by competitive labour costs and manufacturing expertise gained through the country’s established ready-made garments industry. Leading international brands such as H&M, Puma, Decathlon, Inditex, Aldi, Matalan, and RedTape have increasingly turned to Bangladesh in recent years to diversify sourcing away from China, especially in the post-pandemic landscape.
Despite its strong growth trajectory, the sector continues to operate on razor-thin profit margins. Labour typically accounts for 20-22 per cent of production costs, while raw materials represent nearly 70 per cent. Exporters also face persistent logistical challenges, including delays at customs and lack of clarity in trade policies, which hinder effective long-term business planning.
Hasnat Md Abu Obida Marshall, Managing Director of Maf Shoes Ltd, confirmed that several US orders have already been cancelled or put on hold following the tariff announcement.
He also pointed to enduring issues such as high import duties on raw materials-sometimes reaching up to 60 per cent-and a lack of competitive government incentives. In comparison, China offers export subsidies ranging from 7-12 per cent and enjoys more efficient access to inputs. Marshall also raised concerns about Bangladesh’s impending graduation from Least Developed Country (LDC) status in November, which may further reduce its trade privileges and impact investor confidence. The fallout from the US tariffs is also affecting other major export sectors, including garments, amplifying concerns about Bangladesh’s broader export resilience.
