Bangladesh has negotiated a 20 percent tariff on exports to the US, down from the 37 percent initially proposed by US President Donald Trump, bringing relief to exporters in the world’s second-largest garment supplier. Apparel makers in Chattogram are hailing the revised US counter-tariff policy as a potential game-changer for Bangladesh’s export economy, urging the government to act swiftly to unlock the full benefits of a shifting global trade landscape.
Recently Textile Focus conversed with Syed Tanzim Mozaher, Director, Independent apparels Ltd and Brothers apparels Ltd – a leading apparel manufacturer in Chattogram. Read the full conversations-
Textile Focus: Could you please share with us the current scenario of the RMG sector?
Syed Tanzim Mozaher: A term frequently used by industry leaders to describe the ready-made garments (RMG) sector is “resilience.” However, even for the typically resilient RMG industry in Bangladesh, the past few years have been highly challenging. The world has been affected by wars, rising business costs, and economic downturns, leaving the industry struggling. Just as we begin to see hope, new obstacles arise. At the turn of this year, our labor costs saw a sharp rise of 56% but our productivity hasn’t increased significantly. I don’t think any other industry in the world has seen wages catapult like this in one go. The ever-resilient RMG industry has somehow weathered that storm as well. Still, as soon as we started to see some stability, the US announced widespread tariffs on all US imports, plunging the industry into its familiar realm of uncertainty.
Most of our buyers have been putting downward pressure on prices, while simultaneously reducing volume. We remain a top destination for RMG still, with only a few countries, including Vietnam and China, with the capacity, expertise, and tenacity to meet global clothing demands. However, our neighbor India, and some farther away in Egypt and Morocco, have been steadily building their garment industry. We are somewhat feeling the pinch, as several orders have already shifted to India. However, the industry has proactively been trying to rise above, but admittedly, many changes will be necessary for us to sustain growth.
Textile Focus: US Tariff now 20 percent, what will be the impact on RMG sector especially the SME factory?
Syed Tanzim Mozaher: I am an SME myself. I have indeed had several sleepless nights since the announcement of the initial 35% tariff on Bangladesh exports to the US (given Vietnam was at 20%). Many factories like mine had seen our shipments being put on hold until there was more clarity on the tariff situation, which was set to be sorted on August 1. Some more unfortunate factories saw their work orders being shifted to Vietnam overnight. Imagine planning your capacity and production cycle based on confirmed orders, only to have them moved elsewhere on short notice. Following the tremendous effort by the negotiating team from Bangladesh, we have successfully reduced our tariffs to 20%.
In cases where 20% of the raw materials are sourced from the USA (i.e., US cotton), the tariff rate may be significantly lower. It remains to be seen exactly how this plays out. However, some buyers have been requesting that we producers give discounts on our FOBs. Many of us are standing firm and not giving in. Still, for so many of us who rely heavily on US exports, and with pressure on booking our capacity, a more feasible approach would be to diversify our export markets to increase our bargaining power. In the short term, we may be fine. But in the longer term, I expect order volumes from the USA to decrease when the US customers start feeling the pinch of the tariffs, with clothing and other items facing potential price hikes. This will especially be true for discount retailers such as Walmart as their customer base will be the most affected by this. SMEs will hence struggle to stay afloat unless they can diversify their markets, which is easier said than done as, for example, exporting requirements markets like the EU requires different compliance requirements.
Textile Focus: Share us the current scenario of Chattogram port situation?
Syed Tanzim Mozaher: Chattogram Port is the heart of our export operations, especially for RMG. But honestly, it’s been under a lot of strain. Congestion, vessel delays, and slow customs clearance have become part of the process now, and that’s a problem. When you’re running on tight lead times, even a 2-3 day delay can throw off the entire production and delivery schedule. The port infrastructure just hasn’t grown fast enough to match the volume we’re handling today. Yard space is limited, container handling is slow, and there’s a lack of coordination between port operations, customs, and inland transport.
We’ve had shipments miss vessels simply due to paperwork delays or a lack of scanning capacity. These things add up not just in cost, but in lost reliability. There are some initiatives in progress, like the Bay Terminal and a push toward digitalization. But implementation needs to move faster. What we need is a more integrated and tech-driven logistics system, not just at the port, but across the entire supply chain. At the end of the day, this isn’t just a port issue. It’s about our ability to stay competitive globally. If we want to keep growing as a sourcing destination, we have to treat logistics as seriously as we treat pricing or compliance.
Textile Focus: How do you see the upcoming challenges of RMG sector for next-level growth?
Syed Tanzim Mozaher: There are many important points we need to focus on if we want to succeed in the global apparel sourcing world. This question deserves its own article. But the first thing we need to address is upskilling our workforce. We do not have enough qualified mid-level managers. We do not have enough people in management with the knowledge and expertise to manage a factory to international standards or handle more intricate styles. Our workers also need upskilling and training to reach the productivity and quality levels required to stay competitive, especially with the rising cost of doing business in Bangladesh. Also, our entire logistical infrastructure needs massive upgrades – from loading onto trucks to loading containers onto vessels. It is not feasible to continue with the logistics system as it is. There is also a lack of MMF textile mills in Bangladesh. We often talk about orders shifting from China, but fail to realize that a bulk of these orders are in synthetics. Without localized fabric, our growth will be limited as we will continue to rely on imports for MMF fabrics (hence increased lead times), and our value addition will continue to be low. With all the points mentioned above, it is difficult to see how we can move from low-cost items to higher-value items such as padded jackets and quilted tops. Exceptions do not make the rule. We need a unified approach to address these issues, and if we can do that, we can steer the industry to new heights.
