Bangladesh fails to capture China's lost US apparel market share despite tariff shifts
RMG exports to US drop 8.38% in Jan-Mar
Bangladesh has failed to capture a significant share of China's declining apparel exports to the United States despite sharp tariff-driven falls in Chinese shipments, with much of the diverted business instead moving to Vietnam and Cambodia, according to the latest US import data and industry experts.
Data released by the Office of Textiles and Apparel show that US apparel imports fell nearly 12% year-on-year during the January-March period of 2026 following the imposition of reciprocal tariffs from mid-2025.
Bangladesh's apparel exports to the US market declined 8.38% during the three months compared with the same period a year earlier.
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The decline was not limited to Bangladesh. Eight of the top 10 apparel exporters to the US market recorded lower shipments during the period. However, while exports from China and India fell sharply by 53% and 27%, respectively, Vietnam and Cambodia managed to increase exports by 2.77% and 18%.
Industry experts said the relatively higher tariffs imposed on China and India reduced US imports from those countries, but Bangladesh was not emerging as the primary alternative supplier.
Instead, countries such as Vietnam, Cambodia and Indonesia are capturing a large share of China's lost market.
Sheheb Udduza Chowdhury, vice-president of the Bangladesh Garment Manufacturers and Exporters Association, said China maintains a strong position in man-made fibre apparel, while Vietnam, Indonesia and Cambodia have also developed strong manufacturing capacity in the segment with substantial Chinese investment.
"Since China is facing difficulties because of the additional tariffs, many of those purchase orders are shifting to these countries," he told The Business Standard.
"That is why Bangladesh is not being able to capture the market share left by China."
Mohiuddin Rubel, an apparel industry researcher and former BGMEA director, said countries like Vietnam, Indonesia and Cambodia are effectively utilising Chinese raw materials to consolidate their hold on the market segments China is being forced to vacate.
US apparel imports decline
According to Otexa data, the United States imported apparel products worth $17.76 billion during January-March 2026, compared with more than $20 billion during the same period a year earlier.
Despite the decline, Vietnam retained its position as the largest apparel exporter to the US market, with exports valued at $39.84 billion.
Bangladesh moved into the second position from February this year, overtaking China for the first time. Bangladesh's exports stood at $2.03 billion, while China's exports fell to $1.69 billion.
Indonesia, India, Cambodia, Mexico, Pakistan and Honduras followed among the leading apparel exporters to the US market.
Exporters expect recovery after June
Bangladeshi apparel exporters said export growth is likely to remain subdued globally, including in the US market, until June, although they expect conditions to improve in the second half of the year.
Sheheb Udduza Chowdhury said export momentum could improve from the months following July.
He said exporters expect the current market uncertainty to ease by then and anticipate a more permanent resolution regarding US reciprocal tariffs, which could help revive demand.
Tariff uncertainty persists after court ruling
Meanwhile, uncertainty surrounding the US reciprocal tariff regime continues after the Trump administration appealed against a court ruling related to the 10% tariff.
International media reported that a US court on 7 May ruled in favour of three companies challenging the tariff. However, exporters said the ruling currently applies only to the three plaintiffs involved in the case.
Reuters reported that the Trump administration filed an appeal against the ruling the following day.
As a result, Bangladeshi exporters said the 10% tariff remains effective until a final judicial decision is reached.
Mohiuddin Rubel said the court had not suspended collection of the tariff entirely and that the verdict was based solely on arguments presented by the three individual plaintiffs.
"The Trump administration filed an appeal on May 8, 2026, against the court's ruling regarding Section 122," he said.
"If the administration's appeal is accepted, importers will not be able to reclaim the 10% tariff. Conversely, if the appeal is denied, those importers will be able to apply for refunds. The same process will apply to others who are applying or preparing to apply."
