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Bangladesh's Garment Makers Are Taking Orders From The United States

Oct 30, 2018

Trade frictions between China and the United States have brought many countries to the brink of death.

However, under fire and with more orders from us retailers, Bangladesh's garment industry is emerging as a big beneficiary of the trade war, but the situation in industries such as jute and leather goods has yet to improve.

Although China remains by far the world's largest exporter of manufactured goods, over the past decade, some factory owners have started to shift production to other developing countries such as Bangladesh, Cambodia and Vietnam, according to a recent financial times report.

The move is an attempt to seek lower wages and hedge the political and economic risks of relying on one country.

Local garment manufacturers in Bangladesh have admitted they received more work orders from the United States.

That view has proved correct.

Take the Viyellatex group, a bangladeshi apparel maker that mainly exports to European countries.

David Hasanat, the chairman and general manager of the Viyellatex group, said three us buyers who stopped doing business in Bangladesh two years ago were now preparing big orders, though he did not identify the retailer.

Mr Hasanat said the three buyers were not their only customers, with many us clothing retailers now lining up to place orders as prices in China rise on tariffs.

He added that a trade war was a necessary impetus to move buyers to Bangladesh.

Three out of every 10 buyers Hasanat meets now come from the United States, and over the course of six months, the number of American buyers at Viyellatex rose 25 percent year on year.

If the trump administration ends up repealing nafta, Hasanat said, that number could increase even further.

Earlier, many Chinese apparel companies set up factories in Mexico to enjoy the tariff privileges conferred by the north American free trade agreement.

But now, Chinese investors are moving factories out of Mexico amid concerns about dismantling the north American free trade agreement.

Bangladesh has also benefited from a 10 per cent fall in cotton prices after China imposed high tariffs on natural fibres imported from the us.

China imports $1 billion worth of white fiber from the United States each year.

Similarly, AK Azad, general manager of ha-meem group, a bangladeshi apparel manufacturer, expects orders from us retailers to increase.

Ninety percent of the company's $550 million worth of products are sold in the United States.

Although Vietnam has already benefited greatly from the sino-american trade war, Bangladesh does have room to increase its profits, especially for the garment industry.

"" but first we need to improve our production capacity," "added AK Azad.

Siddiqur Rahman, President of the Bangladesh garment manufacturers and exporters association, said the "" kickbacks" "brought about by the trade war may not be immediately apparent.

"But it's true that orders are better now than last year," he said.

The value of the global apparel business also showed a downward trend last year, with China's market share falling to 34.9 per cent from 36 per cent, even though it remains the world's largest clothing supplier.

According to the world trade organization (WTO), Bangladesh's exports total $29 billion, increasing its share from 6.4 percent to 6.5 percent.

Other sectors, however, have yet to show gains.

Mr Enamul Haque Patwary, former President of Bangladesh's Jute Goods Exporters' Association, said Jute products have yet to benefit from a trade war.

Manufacturers and exporters have also said that orders for leather and leather goods from Bangladesh have yet to surge.