Context:

Bangladesh's garment industry, a vital economic engine, faces significant threats from potential U.S. tariffs, which could undermine decades of growth and improved living standards. The industry, employing millions and pivotal to national income, risks a downturn if tariffs are reinstated following their temporary pause. Despite past challenges, including political upheaval and the Rana Plaza disaster, the industry has evolved, consolidating to increase export value and improve working conditions. The looming tariffs exacerbate economic vulnerabilities exacerbated by recent political instability and international monetary pressures. With the garment sector accounting for a substantial portion of exports, any disruption could have widespread repercussions for Bangladesh's economy and workforce.

Dive Deeper:

• Bangladesh's garment industry has been instrumental in transforming the nation's economy by becoming a global hub for clothing exports, raising incomes significantly higher than those in neighboring India. The industry employs around four million people directly and supports many more indirectly.

• The possibility of a 37 percent U.S. tariff on Bangladeshi goods threatens to destabilize this vital sector, which constitutes nearly 85 percent of the country's exports. Even a 10 percent tariff is challenging for this low-margin industry, which faces fierce competition from countries like China and Vietnam.

• Political instability following the ousting of former leader Sheikh Hasina has left Bangladesh vulnerable, with efforts to restore democracy still in progress. The country is under pressure from international financial institutions to reduce subsidies and increase fuel prices amidst an economic downturn.

• The garment sector has undergone significant changes since the 2013 Rana Plaza collapse, improving safety standards and consolidating into fewer, more efficient factories. Bangladesh now boasts the highest number of LEED-certified garment factories globally, demonstrating its commitment to sustainable practices.

• Despite recent political turmoil, where many businesses were attacked for alleged ties to the Hasina regime, factories like 4A Yarn Dyeing have managed to maintain operations without disruption. This resilience underscores the sector's critical importance to Bangladesh's economy and the livelihoods of its people.