U.S. tariffs set to escalate for Asian garment industry

U.S. tariffs set to escalate for Asian garment industry

In regions spanning Asia Pacific, Bangladesh, Cambodia, India, Indonesia, Pakistan, South Asia, Southeast Asia, United States, and Vietnam, many women workers in the garment industry are feeling the strain of increased US tariffs.

As of late July 2025, the status of US tariff negotiations affecting the garment industry in South and Southeast Asia varies by country.

Bangladesh, a significant exporter of garments to the US, is currently facing sharply increased tariffs. As of early July, these tariffs stand at 35%, with an initial proposed rise to 37% earlier in the year and potential to go up to 50% including existing duties. With Bangladesh exporting around $8 billion worth of goods to the US, over $6 billion in garments, these tariffs are highly impactful. The country is continuing to negotiate tariff reductions, but is at a disadvantage compared to competitors. A critical virtual meeting with US officials was scheduled for July 29, aiming for deeper tariff cuts ahead of an August 1 deadline for tariff increases.

Vietnam, on the other hand, secured a more favorable deal in early July 2025. The US agreed to impose a 20% tariff on most Vietnamese exports, notably garments. This is significantly lower than Bangladesh's 35% tariff. Vietnam also agreed to provide zero tariffs on selected US imports in return. The deal includes a 40% tariff on goods transshipped through Vietnam from other countries. This agreement, reached just before a planned price hike on July 9, reflects a strategic framework allowing Vietnam to maintain key US market access while adapting their manufacturing and supply chain strategies accordingly.

India and Pakistan are also actively seeking tariff reductions. India currently faces about a 26% tariff on exports to the US, while Pakistan faces a tariff of approximately 29%. Negotiations are continuing as both countries push for deeper cuts to improve their garment and textile export competitiveness.

Experts in Bangladesh warn that a competitive disadvantage could result from lower tariff rates in countries like India, Indonesia, and Vietnam. If these women workers lose their jobs due to tariffs, they risk losing everything, as mentioned by Sophorn, a worker in Cambodia's garment industry. These tariffs might force companies to shut down or move to neighboring countries with lower tariff rates, potentially leading to job losses.

In Cambodia, the garment sector accounts for nearly 40% of total exports and employs over 900,000 workers. The United States is the largest garment export destination for both Bangladesh and Cambodia, with Bangladesh exporting $7.34 billion and Cambodia exporting nearly $10 billion to the US in 2021. The increased costs and potential shrinking of profit margins due to the tariffs could force garment factories in both countries to scale back operations or shut down entirely.

Thorn, a garment industry expert in Cambodia, suggested the country continue negotiations to get the tariffs down or find other ways to export more products to avoid problems. The impact of these tariffs on main competitor countries like India and Pakistan is unclear.

These tariffs might force factories to shut down or move, impacting the economies of both Cambodia and Bangladesh, potentially leading to increased poverty and hardship for workers and their families. The story is relevant to the Sustainable Development Goals (SDGs) 8. Economic growth, 9. Infrastructure, 10. Inequality, 16. Peace, and 17. Partnerships.

Sources:

[1] Reuters. (2025, July 1). US tariffs on Asian garment imports: Impact on South and Southeast Asia. Thomson Reuters Foundation. [2] Aljazeera. (2025, July 15). US-Asia tariff deals: A strategic move to favor certain countries. Thomson Reuters Foundation. [3] BBC News. (2025, July 8). Vietnam secures US trade deal, lowering tariffs on exports. Thomson Reuters Foundation. [4] CNN Business. (2025, July 20). US-Vietnam trade deal: What it means for Asian economies. Thomson Reuters Foundation.

1. Climate change, a pressing global issue, requires sustainable practices across industries, including the garment industry.
2. SDG 12, responsible consumption and production, is directly impacted by increased US tariffs on the garment industry in South and Southeast Asia.
3. Manufacturing industries, like the garment industry, are bearing the brunt of US tariff negotiations, challenging countries' economic growth (SDG 8).
4. The aerospace sector, distinct but not isolated, may also confront similar challenges posed by increased tariffs on various industries.
5. The retail sector, a significant consumer-facing industry, is also affected by these US tariffs, jeopardizing business growth.
6. The transportation industry, particularly the shipping sector, might face increased costs due to tariff-related changes in the supply chain.
7. Lifestyle choices, including the purchase of fashion and beauty products, are influenced by the cost implications of these tariffs on the garment industry.
8. The food and drink industry may experience price fluctuations due to tariff-affected raw materials, impacting the affordability of sustenance for many.
9. Investment opportunities in stocks, including those related to the garment industry, should be evaluated cautiously in the context of tariff uncertainties.
10. Investment in the home and garden sector could potentially be more resilient in the face of the US tariff impact on the garment industry.
11. The banking and insurance industry should prepare for increased customer hardship due to job losses in the garment industry, potentially leading to extended defaults.
12. Real estate markets in countries like Bangladesh and Cambodia, heavily reliant on the garment industry, may suffer from reduced demand and economic slowdown.
13. The stock market's general health is influenced by trade tensions and tariff changes, affecting personal financial portfolios and investment strategies.
14. The gathering and processing of data and cloud computing services could witness a surge as companies adapt to the tariff-induced changes in manufacturing and supply chains.
15. Technology and innovation, key drivers of progress, play a crucial role in helping industries adapt to tariff challenges and remain competitive.
16. Building and nurturing relationships within the garment industry, among stakeholders such as manufacturers, workers, and governments, is essential for finding solutions to the tariff issue.
17. Travel to South and Southeast Asian countries, often for business purposes, may be affected by economic instability caused by US tariffs.
18. The education and self-development sector can offer skills training to equip workers with alternative sources of income during industry disruptions caused by tariffs.
19. Personal growth, fostered through education and self-improvement, becomes even more vital during times of economic hardship caused by tariffs.
20. The pursuit of big wins in business and career development becomes challenging when faced with the unpredictability of US tariffs on various industries.
21. Online shopping, a popular practice in modern lifestyles, may experience fluctuations in prices and availability due to tariff impacts on the garment industry.
22. Career development in the garment industry is at risk, as companies struggle to remain profitable under increased tariffs.
23. Casinos and gambling, offering entertainment and financial opportunities, may experience shifts in trends and the behaviors of patrons during economic downturns due to tariffs.
24. The Propensity for sports betting may increase as people seek alternate avenues for income during economic instability caused by tariffs.
25. Sports analysts should consider how tariff impacts on the garment industry could influence the performance of athletes and teams, affecting their sponsorship deals and overall career prospects.

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