Major garment producer Bangladesh says US buyers halting orders

Textile and garment production accounts for about 80 percent of exports in Bangladesh – Copyright AFP Munir UZ ZAMAN

US buyers have begun halting orders from Bangladesh, the world’s second-biggest garment manufacturer, after punishing US tariffs that pushed the government in Dhaka to plead on Monday for a three-month pause to the levies.

Textile and garment production accounts for about 80 percent of exports in Bangladesh and the industry has been rebuilding after it was hit hard in a student-led revolution that toppled the government last year.

US President Donald Trump hit Bangladesh with biting new tariffs of 37 percent on Wednesday, hiking duties from the previous 16 percent on cotton products.

Reports of the swift biting impact come as interim leader Muhammad Yunus pleaded with Trump to “postpone the application of US reciprocal tariff measures”, the government said in a statement.

Yunus wrote to Trump to ask for “three months to allow the interim government to smoothly implement its initiative to substantially increase US exports to Bangladesh”, the statement added.

Those products include “cotton, wheat, corn and soybean which will offer benefits to US farmers”, it read.

“Bangladesh will take all necessary actions to fully support your trade agenda,” Yunus told Trump, according to the statement.

– ‘In limbo’ –

Manufacturers said the impact had been near immediate.

Mohammad Mushfiqur Rahman, managing director of Essensor Footwear and Leather Products, said he received a letter from one of his buyers requesting a shipment halt.

“My buyer asked me to stop a shipment of leather goods — including bags, belts, and wallets — worth $300,000 on Sunday,” Rahman told AFP.

“He’s a long-time buyer and now both of us are in limbo over the issue.”

Rahman, who has been operating since 2008, usually sends goods averaging about $100,000 to the United States every month.

Bangladesh exported approximately $8.4 billion worth of goods to the United States last year, of which $7.34 billion came from the ready-made garments sector.

Bengali newspaper Prothom Alo also quoted AKM Saifur Rahman, CEO of ready-made garments producer Wikitex-BD, saying that his US buyer had requested a halt to a shipment worth $150,000.

“My US buyer said it is not possible to pass the extra cost on to their clients, so we need to lower the price,” Rahman told the daily.

– ‘Request your patience’ –

Md Anwar Hossain, government-appointed administrator of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), sent a letter to US-based buyers pleading for understanding.

“We are aware that several brands and retailers have already reached out to their Bangladeshi suppliers, expressing concern and, in some cases, discussing possible measures to mitigate the impact,” Hossain wrote.

“We understand the urgency, but transferring the burden downstream to suppliers at this early stage will only exacerbate the stress,” he added.

“We humbly request your patience and support during this period as Bangladesh pursues a meaningful resolution.”

But former BGMEA director Mohiuddin Rubel said some buyers have already asked for shipments to be put on hold until further notice.

“In particular, smaller buyers are pressuring suppliers to either absorb the full tariff, or share the cost,” Rubel told AFP.