The company "Accenture Footwear and Leather Products Ltd" in Savar, Dhaka, was preparing to ship leather bags worth USD 300,000 to the United States this week. However, on Sunday morning, representatives from the buyer company sent a message instructing them to halt the shipment.
Confirming this, the Managing Director (MD) of Accenture Footwear and Leather Products Ltd, KM Mushfiqur Rahman, told Prothom Alo last night that the representatives of the buyer company will discuss President Donald Trump's reciprocal tariffs later this week. They are essentially asking for a price discount to offset the loss caused by the additional tariffs.
Rahman said that they export leather goods worth about 1 million US dollars every month, with 90 per cent of their total exports going to the United States.
Other export companies like Accenture Footwear and Leather Products Ltd have also received instructions from US buyers to temporarily suspend orders. Some buyers are requesting price reductions as well.
Several exporters from the garment and leather sectors told Prothom Alo that the number of orders being suspended or requests for price cuts from US buyers is still relatively low. Buyers have started responding from Sunday after the weekend, and this number may increase from Monday. The true extent of the situation will be clearer by the end of this week.
In his second term as US President, Donald Trump had previously threatened to impose tariffs. On Wednesday, 2 April (at 4 PM US time, 2 AM Bangladesh time), Trump announced a new tariff policy in the White House Rose Garden. He imposed a minimum 10 per cent tariff on all importing countries. However, additional tariffs were imposed on products from several countries. This reciprocal tariff move by Trump has been causing significant global uproar for several days.
Donald Trump imposed a 37 per cent reciprocal tariff on Bangladeshi products. The tariff for Bangladesh's competitors, India and Pakistan, is set at 26 per and 29 per cent, respectively. However, for another competitor, Vietnam, the counter-tariff stands at 46 per cent. In China, the total tariff rate, including the reciprocal tariff, has reached 54 per cent.
The US administration used a formula to determine the tariff rate. This formula divides the trade deficit of a particular country by the amount of US imports from that country, and the resulting percentage is used to calculate the tariff. For Bangladesh, the tariff rate was calculated to be 74 per cent, but only half of it, 37 per cent, has been applied to Bangladeshi products.
According to the US Trade Representative’s office, last year, Bangladesh exported goods worth 8.36 billion US dollars to the US, while it imported goods worth 2.21 billion US dollars from the US. This results in a trade deficit of 6.15 billion dollars between the two countries.
Garment orders suspended
More than 80 per cent of Bangladesh's total export earnings come from the ready-made garment (RMG) sector, with the US being the largest single market for these exports. In the last 2023–24 fiscal year, 18 per cent of Bangladesh's readymade garment exports went to the United States. Consequently, Bangladesh's garment exporters have become extremely concerned following Trump's reciprocal tariff imposition.
A US buyer company has suspended a three hundred thousand US dollar order with a Bangladesh-based buying house called Wikitex-BD. This company had already imported fabric to produce the goods for the order. Another order worth 150 thousand US dollars was also suspended.
Confirming this, the CEO of the company, AKM Saifur Rahman, told Prothom Alo, "My US buyer is saying that there is no possibility of raising the price from the end buyer. Therefore, they are asking us to reduce the price."
Leaders of the Bangladesh Garment Buying House Association (BGBA) mentioned that one buying house exports ready-made garments worth 1.2 million US dollars to a US buyer every month. These garments were being produced in a 17-line factory. After the reciprocal tariff imposition, the US buyer is asking for price reductions on the goods already shipped and has also suspended the June orders. They have said that shipments will not be required from July.
Pacific Jeans Group, one of Bangladesh’s top 10 readymade garment exporters, exported 40.5 million US dollars worth of garments in the 2023–24 fiscal year, including 4.9 million US dollars worth of denim products to the US.
Syed Mohammad Tanvir, Managing Director of Pacific Jeans Group, told Prothom Alo last night, “Due to the US weekend holidays, we did not receive any response from buyer representatives for two days. Once they resume work tomorrow (today), we may begin receiving their feedback.”
Meanwhile, last night at a hotel in the capital, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) administrator, Mohammad Anwar Hossain, met with business leaders from the garment and other sectors regarding Trump’s counter-tariff.
Exporters expressed concerns that if the issue is not resolved, it could have a significant negative impact on product exports.
When asked about the responses from buyers, Rubana Huq, former president of BGMEA, told Prothom Alo, “We are learning from exporters that major US buyers like Walmart and Gap are asking Bangladeshi suppliers to bear the 37 per cent tariff. Orders are also being suspended.”