The United States’ tariffs are putting uneven pressure on local garment exporters, with factories reliant on the American market showing strain, while those linked to the EU remain more stable, according to a recent Better Work Bangladesh survey.

The survey noted that Bangladesh’s garment exports were concentrated in the EU and US, with US-linked factories under greater pressure.

The report, titled ‘Assessing the early impacts of tariff uncertainty on the garment sector in Bangladesh’, was published last month by BWB, a joint initiative of the International Labour Organization (ILO) and the International Finance Corporation (IFC).

BWB monitors compliance with national labour laws and international labour standards in around 490 factories supplying 50 global brands across eight key clusters.

According to the report, production in the first quarter of 2025 remained relatively stable compared with the same period in 2024, but the impact varied across markets.

Nearly half of factories (46 per cent) reported no major change in output, while around one-third (34 per cent) saw production increases.

About 16 per cent of factories reported declines. Factories exporting to the US were 14 percentage points less likely to report higher production than those exporting elsewhere.

By contrast, EU exporters were 16 percentage points more likely to report increased output.

The report stated that most factories remained resilient, supported by medium-term orders and stable sourcing links, but noted that early warning signs such as worker grievances and retrenchments indicated potential risks.

It said that shorter order pipelines in some markets highlighted the sector’s vulnerability to prolonged or renewed shocks.

The report also showed that a majority of factories had secured medium- to long-term orders, with 64 per cent reporting commitments for the next three to six months and 30 per cent for over six months.

Factories linked to the EU were more likely to hold medium-term contracts but less likely to secure longer-term orders, reflecting cautious purchasing strategies.

More than half of respondents (53 per cent) indicated that their current orders and raw materials would allow operations to continue for at least three months.

The report noted that the vast majority (92 per cent) had experienced no buyer discontinuation in 2025, while only 6 per cent lost one buyer and fewer than 3 per cent lost multiple buyers.

To track the immediate effects of the new US tariffs, BWB launched a Factory Pulse Tracker Survey in May 2025.

The online survey gathered 323 responses, covering about 65 per cent of BWB-listed factories.

It focused on factory performance, buyer relations, production trends, business sustainability, workforce dynamics, and overall business sentiment.

BWB said the timing of the survey allowed them to capture early reactions during the period of highest uncertainty, providing evidence to help policymakers, industry stakeholders, and partners plan mitigation strategies.

In 2024, Bangladesh earned $38.48 billion from garment exports, highlighting the sector’s key role in growth and employment.

The country relies heavily on the EU and US, which together accounted for more than 60 per cent of export revenues in 2024-25.

This dependence makes the industry vulnerable to changes in trade policy and global demand.

In April 2025, the US introduced a reciprocal tariff of 37 per cent on Bangladeshi exports, adding to an existing 15 per cent duty and raising total tariffs to 52 per cent.

Following negotiations, the tariff was later reduced to 20 per cent in August.

Despite this, exports to the US grew by 19.83 per cent in January–September 2025, earning $5.64 billion, according to official US data.