LONDON/NEW YORK: Suppliers to Walmart have delayed or put on hold some orders from garment manufacturers in Bangladesh, according to three factory owners and correspondence from a supplier seen by Reuters, as US President Donald Trump's threat of a 35 per cent tariff on the textile hub disrupts business.
Bangladesh is the third-largest exporter of apparel to the United States, and it relies on the garment sector for 80 per cent of its export earnings and ten per cent of its GDP. The factory owners all said they expected orders to fall if the August 1 tariffs go into effect, as they are unable to absorb that 35 per cent rate.
Iqbal Hossain, managing director of garment manufacturer Patriot Eco Apparel Ltd, told Reuters an order for nearly one million swim shorts for Walmart was put on hold on Thursday (July 10) due to the tariff threat.
"As we discussed please hold all below Spring season orders we are discussing here due to heavy Tariff per cent imposed for USA imports," Faruk Saikat, assistant merchandising manager at Classic Fashion, wrote in an email to Hossain and others seen by Reuters. Classic Fashion is a supplier and buying agent that places orders for retailers.
"As per our management instruction we are holding Bangladesh production for time being and IN case Tariff issues settled then we will continue as we planned here."
The hold was not decided by Walmart, Saikat told Reuters, but by Classic Fashion itself.
Walmart did not respond to a request for comment. Bangladesh is currently in talks with the United States in Washington to try to negotiate a lower tariff. Trump in recent days has revived threats of higher levies on numerous nations.
"If the 35 per cent tariff remains for Bangladesh, that will be very tough to sustain, honestly speaking, and there will not be as many orders as we have now," said Mohiuddin Rubel, managing director at jeans manufacturer Denim Expert Ltd in Dhaka.
Rubel, whose company produces jeans for H&M and other retailers, said he expects clients will ask him to absorb part of the tariff, but added this would not be possible financially. Manufacturers have already absorbed part of the blanket ten per cent tariff imposed by the US on April 2.
"Only probably the big, big companies can a little bit sustain (tariffs) but not the small and medium companies," he said. Retailers have front-loaded orders since Trump returned to the White House, anticipating higher tariffs. Jeans maker Levi's, which imports from Bangladesh, said on Thursday it has 60 per cent of the inventory it needs for the rest of 2025.
US clothing imports from Bangladesh totaled US$3.38 billion in the first five months of 2025, up 21 per cent from the year-earlier period, according to US International Trade Commission data.
Another Dhaka-based garment factory owner said an importer with whom he was negotiating a spring 2026 order of trousers for Walmart asked him on Thursday to wait a week before the order would be confirmed due to the tariff risk.
Hossain said he may look for more orders from European clients to make up for lost orders if the US 35 per cent tariff gets implemented, even if he has to cut prices to stimulate demand. - Reuters
