Bangladesh’s ready-made garment (RMG) sector is bracing for renewed pressure as uncertainty surrounding the United States’ short-term 15% tariff has prompted American buyers to delay fresh orders and renegotiate existing contracts.

Exporters say the lack of clarity over whether the tariff—currently set for five months—will be extended, increased, or withdrawn has created a procurement stalemate in the country’s largest apparel market.

Buyers Adopt Wait-and-See Approach

At least eight Bangladeshi exporters told TDA that US clients are “sitting on the fence” amid rapidly shifting trade policies. Seven reported a pause in decision-making, warning that order flows may not normalise without long-term policy certainty.

Shovon Islam, managing director of Sparrow Group, said buyers are in observation mode.

“They are deferring decisions until the final tariff structure becomes clear. Without certainty, long-term planning is impossible,” he said.

SM Khaled, managing director of Snowtex Group, echoed the concern.

“Our current order book is secured until June, but there is deep uncertainty about what happens after the five-month window,” he said.

Khaled noted that the United States accounts for 20% of his company’s annual exports, which exceed $200 million. He described the current situation as a procurement deadlock, with buyers reluctant to commit beyond immediate requirements.

Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association, termed the situation “unpredictable.”

“Buyers are in the dark about where the tariff rates will finally land,” he said, adding that customers are placing minimum-volume orders as a precautionary measure.

Policy Volatility Adds to Risk

Economists say the stop-start nature of US trade policy is amplifying uncertainty.

Professor Mustafizur Rahman, distinguished fellow at the Centre for Policy Dialogue, pointed to ongoing legal and administrative shifts shaping tariff measures.

“The Supreme Court struck down the initial reciprocal tariffs, but the administration quickly introduced new ones under different statutes,” he said.

He warned that because President Donald Trump retains the authority to impose targeted tariffs on specific countries or products, buyers are operating under significant uncertainty and booking orders only when unavoidable.

The US remains Bangladesh’s largest apparel export destination, absorbing around 20% of total garment shipments.

Data from the US-based Office of Textiles and Apparel (Otexa) show that US imports from Bangladesh reached $8.18 billion in 2025, accounting for 11% of total US global apparel sourcing.

Earlier in April 2025, the Trump administration set a 37% reciprocal tariff on Bangladesh, which was later negotiated down to 20% by August. The current 15% rate has raised concerns among exporters that a uniform tariff applied equally across countries could erode Bangladesh’s competitive advantage.

“The earlier tariff structure gave us a head start over China and India,” Khaled said. “With a flat tariff, that incentive disappears.”

Otexa data indicate that between January and November 2025, Chinese garment exports to the US fell 34%, while Bangladesh’s shipments rose 12%, alongside gains by several other apparel-exporting nations.

Exporters warn that a level tariff regime could intensify competition and reverse those gains.

Renegotiations and Price Pressure

The reduction of the tariff from 20% to 15% has already triggered renegotiation attempts.

TDA reviewed an email from a mid-sized US buyer requesting a 2% downward adjustment in the Delivered Duty Paid (DDP) cost for goods that have not yet cleared customs.

A senior official at a Dhaka-based buying house, speaking on condition of anonymity, said intermediaries may have to absorb the cuts.

“We cannot push manufacturers for further discounts. We have to absorb the adjustments ourselves,” he said, noting that 90% of his firm’s shipments go to the US.

Other agents reported scrambling to respond as Washington’s weekend tariff shift coincided with the start of the US business week.

Industry leaders caution that further renegotiation demands may follow. However, exporters argue that the 5-percentage-point reduction should not be captured entirely by retailers, noting that manufacturers had already reduced prices during the higher-tariff period to retain orders.

Shovon Islam said his group plans to seek a 1% share of the tariff savings.

Khaled expressed skepticism.

“The buyers are pocketing the entire benefit of the lower rates without offering us any concessions,” he said.

For now, Bangladesh’s garment sector finds itself caught between policy unpredictability in Washington and pricing pressure from its largest export market—awaiting clarity that remains elusive.