Tariffs: US textile buyers in Bangladesh have suspended orders, according to manufacturers
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American buyers have begun suspending orders from Bangladesh, the world's second-largest garment manufacturer, following the increase in US tariffs, leading the interim Bangladeshi government to call on Monday for a three-month suspension of these taxes.
Textile and garment production accounts for approximately 80 percent of the exports of this South Asian nation, an industry that is rebuilding after being severely affected by the revolution that overthrew the government last year.
US President Donald Trump imposed new punitive tariffs of 37 percent on Bangladesh on Wednesday, compared to the previous rates of 16 percent for cotton products and 32 percent for polyester products.
The consequences of these announcements are already being felt in the country, leading the head of the interim government, Muhammad Yunus, to call on Donald Trump to "delay the implementation of reciprocal US customs measures," according to a government statement.
Yunus wrote to the US President to request a delay of "three months to allow the interim government to smoothly implement its initiative to substantially increase US exports to Bangladesh," the statement said.
These products include "cotton, wheat, corn, and soybeans, which will benefit American farmers," the statement emphasized.
"Bangladesh will take all necessary measures to fully support your trade agenda," the head of the Bangladeshi government told Donald Trump.
Suspended deliveries
Textile manufacturers say the impact of the tariff increase has been almost immediate.
Mohammad Mushfiqur Rahman, Managing Director of Essensor Footwear and Leather Products, said he received a letter from one of his buyers requesting that his delivery not be shipped.
"My buyer asked me on Sunday to halt a shipment of leather goods - bags, belts, and wallets - worth 300,000 dollars," Rahman told AFP.
His company, established in 2008, ships an average of $100,000 worth of goods to the United States each month.
Bangladesh exports 8.4 billion dollars worth of clothing to the United States each year, according to data from the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), representing approximately 20 percent of its total ready-to-wear garment exports.
According to the Bengali daily Prothom Alo, AKM Saifur Rahman, CEO of garment manufacturer Wikitex-BD, indicated that his American buyer asked him not to send an order worth 150,000 dollars.
"He said he couldn't pass the extra cost on to his customers, so we have to lower the price," Rahman told the newspaper.
Mohammed Anwar Hossain, an official at the BGMEA, sent a letter to American buyers asking them to show understanding.
"We understand the urgency, but passing the burden downstream to suppliers at this early stage will only increase concerns," Hossain wrote, calling for their "patience and support."
But Mohiuddin Rubel, former director of the BGMEA, said that some buyers had already requested the suspension of their shipments until further notice.
"Smaller buyers, in particular, are pressuring suppliers to either absorb the full tariffs or share them," Rubel told AFP. (AFP)
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