Bangladesh has failed to capitalise on shifting global sourcing patterns in the wake of intensifying US-China trade tensions, according to the Q2 2025 Sourcing Barometer published by QIMA, a leading supply chain compliance solutions provider.

Despite global trade demonstrating resilience amid mounting supply-side pressures, demand for inspections and audits in Bangladesh — a key measure of international sourcing activity — remained flat in the first quarter of the year, it said.

The lack of growth comes as Western buyers increasingly diversify away from China, yet the South Asian manufacturing hub has seen little benefit from this realignment, prompting renewed scrutiny of its competitiveness in a changing global trade landscape, the report mentioned.

While Bangladesh remains a key player in cotton-based garment manufacturing, its reliance on this product segment may be limiting growth in a market where buyers are increasingly seeking greater flexibility and product diversity.

The QIMA report noted that US brands and retailers, faced with unpredictable trade policies, are diversifying their sourcing strategies — but Bangladesh has yet to capitalise on this shift.

In contrast, several Southeast Asian countries recorded notable gains in sourcing activity during the first quarter of 2025.

Indonesia, the Philippines and Cambodia all posted double-digit year-on-year growth, with Indonesia experiencing a third consecutive quarter of surging demand from US buyers.

Overall, inspection and audit demand across Southeast Asia rose by 55 per cent compared to the same period last year.

Bangladesh’s stagnant performance stood in contrast to strong sourcing growth in Latin and South America, where both import and export activity increased in early 2025.

When asked, Mahmud Hasan Khan, former leader of the BGMEA, said that while Bangladesh might not see a significant drop in orders due to its focus on basic garments, countries like India, Pakistan, and Indonesia could be strong competitors.

These countries have robust industries for cotton, yarn, and manmade fibres, allowing them to offer more value-added products, making them more appealing to US brands during the US-China trade tensions, he mentioned.

QIMA data showed a 21 per cent rise in inspections for Chinese imports and a 15 per cent increase for locally manufactured goods, driven by the growing trend of nearshoring to serve the US market.

China, long considered the backbone of global sourcing, has managed to maintain a steady flow of orders, though its relative share in sourcing portfolios of Western buyers declined for the first time since the COVID-era of 2022.

While US buyers are not dramatically pulling back from China—inspection and audit demand remained flat year-on-year—there is clear momentum toward reducing dependency on the country, QIMA report said.

It also said that the traditional alternatives to China, such as Vietnam and Cambodia, also experienced stagnant or pressured demand in Q1.

Vietnam, in particular, may be feeling the effects of anticipated retaliatory tariffs under renewed US trade policy. Cambodia, while benefiting from a +36 per cent year-on-year increase in inspection and audit demand, faces uncertainty as it is among the countries hardest hit by the April tariff package.

Indonesia and the Philippines have emerged as key players in global sourcing, with Indonesia seeing three consecutive quarters of booming US demand, while the Philippines recorded a 62per cent rise.

India, another key South Asian manufacturing hub, continued to see moderate interest, especially from Latin and South American buyers.

While QIMA’s report does not provide specific figures for India, it is grouped alongside Vietnam and Bangladesh in a broader trend of buyers seeking diversified sourcing options away from China.

QIMA barometer highlighted a sourcing landscape in flux, with nearshoring gaining traction, particularly in Latin and South America, where inspection and audit demand increased by 15 per cent year-on-year.

However, only 13 per cent of businesses surveyed globally reported full visibility into their supply chains, making it increasingly difficult to respond effectively to trade disruptions.