Factories having links with US market under pressure: Survey

A new survey funded by two international agencies has warned that heightened US tariffs are already creating uneven but mounting economic pressures on Bangladesh’s garment industry, with factories heavily dependent on the American market showing early signs of strain.

The study, conducted by Better Work Bangladesh (BWB) in partnership with the International Labour Organisation (ILO) and the International Finance Corporation (IFC), highlights the risks of Bangladesh’s high export concentration in the United States and European Union. While reliance on the EU appears to offer some stabilising effect, the report notes that dependence on the US market is “already in a strained state”.

The findings, published in BWB’s report Assessing the Early Implications of Tariff Uncertainty on the Garment Sector in Bangladesh, are based on data from around 490 factories supplying roughly 50 global brands across eight industrial clusters. These factories undergo regular BWB assessments to ensure compliance with national and international labour standards.

Although overall production volumes remained relatively stable in the first quarter of 2025 compared with the same period a year earlier, the impact varied sharply across markets. One-third of factories reported higher output, while 16% saw declines and nearly half registered no major change. Exporters to the United States were 14 percentage points less likely than other exporters to report production growth, whereas firms supplying the EU were 16 percentage points more likely to post increases.

Despite the emerging risks, the report indicates that most manufacturers remain resilient, supported by medium-term orders and established sourcing relationships. Some 64% of factories said they have confirmed orders for the next three to six months, and 30% reported commitments extending beyond six months. More than half (53%) also said their current order books and raw-material supplies would sustain operations for at least three months, reducing the risk of immediate disruption.

The survey shows little evidence so far of a major withdrawal by international buyers. A substantial 92% of factories reported no termination of contracts in 2025, with only a small minority losing one or more buyers.

To capture the sector’s immediate response to the tariff escalation, BWB launched a Factory Pulse Tracker survey in May 2025 via Qualtrics. The online survey received 323 responses—representing around 65% of BWB-listed factories—and assessed production outlooks, buyer relationships, business sustainability, workforce conditions and broader sentiment. BWB says the timing of the study enabled it to record early reactions at the height of uncertainty, offering policymakers and industry stakeholders timely insight to develop mitigation strategies.