US Tarrif : Will all the apparel orders from India and China flock to Bangladesh?

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Share Naimul Hasan, Director, Abloom Design Ltd Towards the end of last month a general sense of calm settled over Bangladeshi RMG exporters. Bangladesh, presented with a 20% Reciprocal Tariff, Vietnam got the same treatment. India on the other hand got 25%, with more to follow. Which was later brought up to 50%. China hovers around 30%. Fast forward to today, news channels and other outlets celebrates this, like what they believe is the biggest win for Bangladesh RMG in decades. Buyers are lining up, knocking our doors to place orders. Will all the apparel orders from India and China flock to Bangladesh?

Lets break it down, No matter which country gets what deal served to them, tariffs are guaranteed to increase the price of goods in US Shelves. Approximately every US citizen will have to pay $5000 more a year for Trumps Taxes. On top of inflation and high cost of living, this will certainly make things difficult for the consumers. Demand for consumer goods will fall. For a bulk of US Apparel orders already with Bangladesh, quantities will shrink. Secondly, cost of buying from India and China will increase. Even if Brands are eager to place with Bangladesh, doesn’t mean we have the capacity or capability to meet their needs. China’s 176 billion industry specialises in high end- man made fibres- complex items. China is miles ahead of us in this regard. What Bangladesh makes up for in resilience and cost effectiveness, it lacks in bureaucracy and policy support. It may sound like I am criticising our government, hold up, appreciation is coming soon. The level of barriers, red tape and corruption we have to face every step of the way, cannot be described in an article. Our internal systems are broken and corruption runs deep. Policy and government cooperation has power to launch the industry to incredible heights. It is commendable, how fast and efficient our government was in negotiations. Our current position gives us a competitive edge to usher in value added goods. US Buyers have been trying to divert orders from China for years now. It is up to us to invest in man made fibres and more complex outerwear. Build infrastructure to support manufacture of high end products. This cannot be achieved without stable business environment, friendly government policies and lower interest rates. Geopolitical waves wash away as fast as they come. We will have to cater to these new buyers, build lasting business relationships and present them with better service. Or else we will forever risk orders moving back to India. Yes, orders are coming in, hats off to the current government for its efforts. However, the scenario is not as simple as Bangladesh winning against Goliaths. Do not be under the impression that the industry is flooded with orders and companies are making money hand over fist. Price pressure- volatile business environment- high interest rates and red tape is still present. There is this one win with everything else remaining constant. Next article #

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