Bangladesh’s ready-made garment (RMG) sector, the backbone of the country’s export economy and a source of livelihood for over four million workers, is reeling from deep anxiety as the United States moves ahead with plans to impose a 35 percent tariff on Bangladeshi garment exports starting August 1. With just weeks remaining before the tariffs take effect, uncertainty looms large - especially for one million workers in small and medium-sized factories now considered at immediate risk of losing their jobs. 
The government remains engaged in high-level discussions with the US in hopes of averting the crisis. However, trade negotiators and industry insiders say the talks have yet to yield any concrete assurance. Amid growing pressure from business leaders, the government is holding a series of meetings to formulate its next steps, including weighing bilateral deals and a potential lobbying push to influence US policymakers.Crisis Triggered by US Retaliatory Tariff Plans: The trouble began on April 2, when the United States announced retaliatory tariffs on imports from 60 countries, citing trade imbalances and policy disputes. Bangladesh was among the hardest hit, with a 35% tariff slated for garment products - slightly reduced from an earlier 37% proposal but still significantly higher than the rates imposed on competitors. Vietnam is set to face a 20% tariff, Pakistan 29%, with expectations that it might be negotiated down to 10%. Though a temporary suspension delayed implementation until July 9, the US reaffirmed its stance through a letter from President Donald Trump to Bangladesh’s Chief Adviser Professor Muhammad Yunus, confirming the tariffs would come into effect from August 1.
The implications are severe. If the tariffs materialize, Bangladeshi garments will effectively face more than 50% total duty in the US market after including existing taxes and logistic costs, severely undermining competitiveness.
Factories on the Brink of Collapse: The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) have sounded the alarm. According to their estimates, at least 1,150 small and medium-sized factories - which produce garments worth $5 to $20 million annually - will be pushed to the edge if the US tariffs are enforced.
“Small and medium factories are the most vulnerable. They lack the financial cushion to absorb such a drastic blow,” said BGMEA Senior Vice President Inamul Haque Khan, also Managing Director of Ananta Garments. “They will lose orders, become unviable, and ultimately shut down - leaving at least one million workers jobless.”
These smaller units employ between 700 and 1,000 workers each - most of them women - who often lack formal contracts, savings, or alternative employment options. “The social implications are staggering,” Khan added.
Former BGMEA Director and TAD Group Managing Director Ashiqur Rahman Tuhin echoed the sentiment, warning that the fallout could become a humanitarian issue. “A 35% tariff could lead to an exodus of buyers, making our exports uncompetitive. If competing countries secure lower tariffs, we’ll start losing our US market share rapidly.”
Sharp Decline in Garment Exports Already Evident: The impact is already being felt. Data from the US International Trade Commission reveals that apparel imports from Bangladesh dropped from $726.8 million in April to just $523.2 million in May - a staggering 28% fall in one month. This followed the imposition of a 10% preliminary duty in April.
In comparison, garment exports to the US during all of 2024 stood at $7.34 billion, out of Bangladesh’s total $8.4 billion exports to the country. Imports from the US were just $2.2 billion, showing a stark trade imbalance that the US administration appears intent on addressing.
“The argument that we’re being unfairly targeted doesn’t hold when you look at the numbers. But we must navigate this diplomatically,” said one official from the Ministry of Commerce.
Lobbying, Bilateral Bargains, and Political Pressure: Industry leaders are urging the government to intensify its diplomatic efforts - including the use of professional lobbyists to represent Bangladesh’s interests in Washington.
“Lobbying is not an act of submission; it’s a necessity in international trade diplomacy,” said Mahmud Hasan Khan Babu, BGMEA President. “Other countries do it - why shouldn’t we? We’re not asking the government to bow down, but to act proactively.”
While the government is open to holding a third round of talks with US representatives, sources say it remains hesitant about officially appointing lobbyists, possibly due to political sensitivities. Still, several stakeholders are urging a broader strategy that includes more than just trade talk.
BKMEA President Mohammad Hatem pointed out that non-trade issues - such as labor rights, democracy, and strategic alignments - are also shaping the US’s stance. “It’s not just about tariffs anymore. A political decision is required to end this impasse.”
Alternative Strategies: Wheat, Boeing, and Soft Diplomacy: To build goodwill with Washington, the government has initiated several bilateral moves. These include a proposal to import 300,000 tonnes of wheat from the US through a government-to-government (G2G) agreement, even at a cost of $20-25 per tonne more than wheat from India or Russia.
Additionally, the government is considering purchasing Boeing aircraft and adjusting import tariffs on US products such as cotton, gas turbines, semiconductors, and medical equipment.
“These moves are designed to address trade imbalances and create a cooperative climate ahead of the August 1 deadline,” said a senior trade advisor, speaking on condition of anonymity. “But whether they will be enough remains to be seen.”
Uncertainty Leaves Workers and Factory Owners in Limbo: The most immediate concern, however, remains the fate of the millions of workers whose livelihoods depend on the garment sector.
“Workers don’t understand tariffs - they understand layoffs,” said Nasima Akhter, a line supervisor at a factory in Gazipur. “We have already been hearing rumors. Some factories are reducing shifts, others are canceling lunch benefits. We’re scared.”
Owners, too, are making contingency plans. Several small factory owners told this correspondent that they are putting new investments on hold and scaling back production. “If orders drop after August 1, we won’t survive more than a few months,” said one entrepreneur who operates a $7 million export facility.
What’s at Stake: Bangladesh’s RMG sector accounts for over 80% of the country’s export earnings and supports more than 4 million jobs, making it the largest employer outside agriculture. The US, as the single largest export destination, is crucial for sustaining this economic pillar.
Trade experts warn that a prolonged loss of competitiveness in the US market will have a cascading effect on employment, foreign reserves, investment sentiment, and long-term growth.
“Bangladesh risks becoming a case study of how overdependence on a single sector and a single market can become an Achilles’ heel,” said Dr. Mahbub Alam, an economist at Dhaka University. He added, “The best-case scenario is a negotiated solution before August. The worst-case scenario is prolonged tariffs, factory closures, and widespread social unrest.”
The Road Ahead: With less than two weeks left before the deadline, Bangladesh’s government is under pressure to deliver results. The business community has made its position clear: meaningful engagement, political outreach, and skilled lobbying are essential.
For now, the fate of one million workers, thousands of small and medium factories, and a significant share of the country’s $47 billion export industry hangs in the balance - pending the outcome of high-stakes diplomacy in Washington. 
Whether Bangladesh will manage to negotiate a fairer deal, or become collateral damage in the shifting sands of global trade politics, will be determined in the coming days. The country, its workers, and its economy can do little more than wait - and hope.