US retailers seek price cuts from Bangladeshi suppliers amid tariff changes

Some buyers have put work orders on hold until they deal with new reciprocal tariff measures because a number of US clothes and footwear shops are requesting significant discounts from Bangladeshi suppliers. According to exporters, some buyers are requesting price reductions of up to 10 per cent on ready-to-ship items, along with delays in the creation of clothing.

While negotiations are ongoing, the response from US buyers has varied. Some are opting to wait and observe the situation before making demands, but others are pushing for immediate adjustments. A representative from the Bangladeshi export sector, who chose to remain anonymous, noted that one US buyer has suggested a shared burden for the discount: 3.3 per cent from suppliers, 3.3 per cent from fabric suppliers and 3.3 per cent from retailers.

Rubana Huq, former president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), confirmed the trend of US buyers seeking discounts but refrained from naming specific retailers or brands. In contrast, Faruque Hassan, managing director of Giant Group, stated that while his US buyers have not yet requested discounts, he anticipates a slowdown in new work orders, predicting a potential drop of nearly 30 per cent in US orders as buyers consider shifting production to countries like Egypt, Jordan and India, which face lower tariffs than Bangladesh.

Syed M Tanvir, managing director of Pacific Jeans, expressed optimism about Bangladesh’s position in cotton fabric garment exports, citing the country’s strong capabilities in this sector. He highlighted that China and Vietnam are currently subject to higher duties than Bangladesh in US markets and emphasised the significant improvements in quality, compliance and production capacity in Bangladesh over the years.

Mohiuddin Rubel, a former BGMEA director and managing director of the Bangladesh Apparel Exchange, reported that some buyers have requested to pause shipments until further notice. He indicated that smaller buyers are exerting pressure on suppliers to absorb the full tariff costs or share them, a practice he deemed unethical. Rubel noted that larger brands have yet to finalise their decisions, but he remains hopeful they will consider the plight of suppliers and the over 4 million workers in the apparel industry before making their choices.

As the situation continues to evolve, stakeholders are closely monitoring the developments, with the hope that US buyers will act with compassion and understanding towards their Bangladeshi partners during this challenging time.