Reuters :
Suppliers to Walmart have delayed or put on hold some garment orders from manufacturers in Bangladesh due to the threat of a 35 per cent tariff imposed by the US, which is set to take effect on August 1, 2025.
This tariff threat has disrupted business as Bangladesh is the third-largest apparel exporter to the US and heavily depends on the garment sector for 80 per cent of its export earnings and 10 per cent of its GDP.
Factory owners have expressed concern that they cannot absorb the 35 per cent tariff rate, leading to expectations of a decline in orders if the tariff is enforced.
Specifically, Iqbal Hossain, managing director of Patriot Eco Apparel Ltd, confirmed that an order for nearly 1 million swim shorts for Walmart was put on hold due to this tariff threat.
Correspondence from Faruk Saikat, assistant merchandising manager at Classic Fashion, a supplier and buying agent for retailers-indicated that all spring season orders discussed were to be held because of the heavy tariff imposed on US imports.
Classic Fashion decided to hold Bangladesh production temporarily, pending resolution of the tariff issues, and will resume orders if the tariffs are settled.
The hold on orders was a decision made by Classic Fashion, not Walmart directly. Bangladesh is currently negotiating with the US to seek a reduction in the tariff.
Industry insiders note that while some large companies might absorb part of the tariff, smaller and medium manufacturers likely cannot sustain such a high rate, which could lead to fewer orders overall.
Retailers have also front-loaded orders in anticipation of higher tariffs, but uncertainty remains about future business volume if the tariff persists.
Suppliers to Walmart have put some garment orders from Bangladesh on hold due to the looming threat of a 35 per cent U.S. tariff on Bangladeshi textile exports.
This hold was not initiated by Walmart itself but by Classic Fashion, a supplier and buying agent managing orders for retailers, according to Faruk Saikat, assistant merchandising manager at Classic Fashion.
He told Reuters that, following management instructions, Bangladesh production is being paused temporarily, with plans to resume if the tariff issues are resolved.
Bangladesh is actively negotiating with the United States in Washington to seek a reduction or exemption from the proposed 35 per cent tariff, which is set to take effect from August 1, 2025.
These talks have seen some progress, with both sides agreeing on several points, but certain issues remain unresolved and further discussions are planned.
The 35 per cent tariff poses a significant challenge to Bangladesh’s garment industry, which accounts for 80 per cent of the country’s export earnings and 10 per cent of GDP.
Industry leaders, such as Mohiuddin Rubel, managing director of Denim Expert Ltd, which produces jeans for brands like H&M, have expressed that sustaining business under such a high tariff would be very difficult.
He anticipates that clients may ask manufacturers to absorb part of the tariff cost, but financially this would be unfeasible, especially for small and medium-sized companies. Some absorption of the earlier 10 per cent tariff imposed in April has already strained manufacturers.
Retailers have front-loaded orders in anticipation of tariff hikes, with companies like Levi’s reporting they have stocked 60 per cent of their needed inventory for the rest of 2025. However, if the 35 per cent tariff remains, order volumes from Bangladesh are expected to decline significantly.
In addition to the tariff, the U.S. is demanding a 40 per cent local value addition in Bangladeshi exports to qualify for market access, a condition that presents further challenges to the industry, particularly the woven garment sector, due to Bangladesh’s reliance on Chinese inputs.
