Trump’s Tariffs Hit Garment Makers in Bangladesh and Sri Lanka Hard

Through Covid, political chaos, and economic disarray, Sri Lanka and Bangladesh kept one industry central to their hopes of prosperity afloat: the manufacturing of ready-made garments, with the United States as their main market.

Then came President Trump’s tariffs.

The two countries are reeling after Sri Lanka was hit with 44 percent tariffs and Bangladesh subjected to 37 percent levies. Officials in both countries scrambled to contain panic among business leaders, who worried that they may no longer be able to compete with bigger manufacturing powers, and that their orders could shift to places with lower tariffs and greater industrial muscle.

“We will have to write our obituary notice,” said Tuli Cooray, a consultant at the Joint Apparel Association Forum of Sri Lanka, an industry association. “Forty-four percent is no joke.”

The Trump administration’s tariffs have hit countries at the heart of the global apparel industry especially hard. An analysis by William Blair, an equity research firm, showed that the countries that produce 85 percent of U.S. apparel imports faced an average tariff of 32 percent.

Targeting the manufacturers not only upends the economies of these nations, but also adds to the burden of U.S. companies, analysts warned. William Blair said merchandise costs could go up by about 30 percent and American consumers may ultimately feel the pinch.

Bangladesh sends more than $7bn of clothing to the U.S. every year. The country’s garment manufacturing industry makes up 80 percent of its total exports and employs more than four million people, mostly women. Bangladesh has one of the highest female work force participation rates in the region, which has helped lift a large section of the population out of poverty.