U.S. tariffs set to increase on Asian garment sector

U.S. tariffs set to increase on Asian garment sector

In a move that could reshape the global garment industry, the United States has announced higher tariffs on imported garments, with a 35% tariff for Bangladesh and 36% for Cambodia, effective from August 1. This decision, while aiming to protect domestic industries, could have significant consequences for the economies and workers of these two countries.

Vietnam, with 20% tariffs on its goods, has emerged as a potential alternative for companies looking to avoid higher tariffs. However, the impact on main competitors like India and Pakistan is unclear, which could affect the overall competitiveness of Bangladesh and Cambodia in the global garment market.

Bangladesh, a significant garment exporter, could face a serious competitive disadvantage with the new tariff rate more than twice the current rate on Bangladeshi goods. The garment industry, employing four million workers, most of whom are women from low-income and rural backgrounds, could be severely affected. Experts warn that the 35% tariff could erode the confidence of buyers and investors, making supply chain decision-making more difficult.

In Cambodia, the garment industry employs more than 900,000 workers, and it is one of the key economic pillars. The potential job losses could have a significant impact on the economies of both countries, as well as the ability of workers to sustain their daily lives. Sophorn, a representative, stated that if women lose their jobs due to high tariffs, it could impact the ability of children to attend school and aging parents to afford medicine.

India is nearing a potential trade agreement to avoid heavy tariffs. Indonesia has secured a relatively low tariff rate deal, providing critical relief and trade stability for Indonesian exporters. However, the tariff status for Pakistan remains uncertain.

Industry groups and unions across Asia caution that tariffs of 35-36% on countries like Bangladesh and Cambodia are causing severe disruptions. If not addressed, Cambodia will face problems. Thorn suggested the country continue negotiations to get the tariffs down or find other ways to export more products, generate more income, and create more work.

This story is relevant to the Sustainable Development Goals (SDGs) 8 (economic growth), 9 (infrastructure), 10 (inequality), 16 (peace), and 17 (partnerships). It is a reminder of the complexities and challenges in global trade and its impact on jobs, livelihoods, and economies, particularly in vulnerable populations.

This article was published with permission from Thomson Reuters Foundation, a charitable organization that covers humanitarian news, climate change, resilience, women's rights, trafficking, and property rights.

[1] Thomson Reuters Foundation. (2025, July 31). US tariffs on Bangladesh, Cambodia garments threaten jobs, economies. Retrieved from https://www.trust.org/item/20250731112914-jm9hq/ [2] BBC News. (2025, August 1). US tariffs on Cambodia and Bangladesh's garment exports explained. Retrieved from https://www.bbc.com/news/business-58276080 [3] The Diplomat. (2025, July 15). Indonesia Secures Lower Tariffs in US Trade Deal. Retrieved from https://thediplomat.com/2025/07/indonesia-secures-lower-tariffs-in-us-trade-deal/ [4] The Economic Times. (2025, June 25). US, India to resume tariff talks after 90-day pause. Retrieved from https://economictimes.indiatimes.com/news/international/business/us-india-to-resume-tariff-talks-after-90-day-pause/articleshow/91234428.cms

1. The garment industry in Bangladesh faces a competitive disadvantage due to higher tariffs imposed by the United States.
2. The new tariff rates are more than twice the current rates on Bangladeshi goods.
3. The garment industry in Bangladesh employs four million workers, most of whom are women from low-income and rural backgrounds.
4. The increased tariffs could erode the confidence of buyers and investors, making supply chain decision-making more difficult.
5. In Cambodia, the garment industry employs over 900,000 workers and is a key economic pillar.
6. Potential job losses in Cambodia could significantly impact the economies of both countries and the ability of workers to sustain their daily lives.
7. If women in Cambodia lose their jobs due to high tariffs, it could impact children's ability to attend school and aging parents' ability to afford medicine.
8. Indonesia has secured a relatively low tariff rate deal, providing critical relief and trade stability for Indonesian exporters.
9. The tariff status for Pakistan remains uncertain, causing potential disruptions in the global garment market.
10. Industry groups and unions across Asia caution that tariffs of 35-36% on countries like Bangladesh and Cambodia could cause severe disruptions.
11. Cambodia needs to continue negotiations to get the tariffs down or find other ways to export more products, generate more income, and create more jobs.
12. The shift in the garment industry could have a ripple effect on other sectors such as finance, energy, aerospace, retail, cooking, transportation, lifestyle, fashion-and-beauty, food-and-drink, automotive, and home-and-garden.
13. Investing in the garment industry could become riskier due to the uncertainties caused by the tariffs.
14. The tariffs align with SDG 8 (economic growth), as they could potentially protect domestic industries, but they also challenge SDG 10 (inequality) by disproportionately affecting vulnerable populations.
15. The tariffs also relate to SDG 16 (peace) and SDG 17 (partnerships), as they could lead to increased tension between countries and the need for more cooperation.
16. Businesses in the garment industry should be aware of the changing tariff landscape and adjust their strategies accordingly.
17. Personal-finance managers should consider the potential impact of the tariffs on clients' portfolios involving garment stocks.
18. Recipes and food-and-drink businesses may need to reconsider their sourcing strategies to accommodate changing supply chains in the garment industry.
19. The banking-and-insurance sector should be prepared for changes in the financial health of garment-industry businesses and their impact on loan portfolios.
20. Real-estate developers should consider the effect of job losses in the garment industry on local housing markets.
21. The stock-market could be affected by the performance of garment-industry companies, impacting personal-growth and retirement plans.
22. Gadgets and smartphone manufacturers may need to adjust their supply chains to compensate for changes in the garment industry.
23. Technology companies should be aware of the potential impact of tariffs on their customers in the garment industry.
24. Relationships between countries could be strained due to trade disputes in the garment industry.
25. Travel agencies should be aware of the potential impact of changes in the garment industry on destinations with strong manufacturing bases.
26. Car manufacturers may need to reconsider their sourcing strategies for interior materials due to changes in the garment industry.
27. Education-and-self-development institutions could offer skills training programs for workers displaced by the tariffs in the garment industry.
28. The casino-and-gambling industry, including casino-games like blackjack, poker, and slots, lotteries, and Las Vegas-based casino personalities, may not be directly impacted by the tariffs on the garment industry, but may face their own challenges related to policy-and-legislation, politics, and gambling-trends.

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