Some Walmart garment orders from Bangladesh on hold due to US tariff threat
Bangladesh is the third-largest exporter of apparel to the United States, and it relies on the garment sector for 80% of its export earnings and 10% of its GDP
Highlights:
- Bangladesh garment sector faces disruption from potential US tariffs
- Factory owners expect declines in US orders if 35% tariffs are imposed
- Bangladesh negotiating with US to lower tariffs amid business uncertainty
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% 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% of its export earnings and 10% 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% rate.
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Iqbal Hossain, managing director of garment manufacturer Patriot Eco Apparel Ltd, told Reuters an order for nearly 1 million swim shorts for Walmart was put on hold on Thursday due to the tariff threat.
"As we discussed please hold all below Spring season orders we are discussing here due to heavy Tariff % 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% 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 10% 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% of the inventory it needs for the rest of 2025.
US clothing imports from Bangladesh totaled $3.38 billion in the first five months of 2025, up 21% 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% tariff gets implemented, even if he has to cut prices to stimulate demand.
