Labour Issues / New Trade Disorder / PART III Commentary

Spotlight: New Trade Disorder

If Deals Don't Work out, Garment Workers in Manufacturing Hubs Face a Bleak Future

The Big Bro vice-like squeeze of the sweeping tariff hikes will soon be felt far beyond edgy boardrooms and uneasy stock exchanges, and there are sporadic reports of this already starting to take effect. For hundreds of thousands of garment workers—many in the factories across South and Southeast Asia, and Africa to a lesser extent—the arbitrary spike in trade tariffs will be a matter of life and death.

Subir Ghosh

9 April 2025

5 minutes

Long Story, Cut Short

Life has not come to a standstill because of the tariff hikes and cancellation of orders on force majeure grounds is unlikely. US-based apparel buyers, however, can still ask for delays (in expectation of favourable deals) or discounts.
If apparel factories are squeezed, they are likely to recover margins from their own employees.
How the new tariffs are going to affect the yarn, fabrics, made-ups and non-apparel segments is not quite known. Also unknown, for that very reason, would be how workers in these sectors would be affected.

Reports have been gradually trickling in about orders being slashed and hiring frozen. There are fears—not entirely unfounded—that factories would be forced to either downsize or shut shop entirely.

And it begins Reports have been gradually trickling in about orders being slashed and hiring frozen. There are fears—not entirely unfounded—that factories would be forced to either downsize or shut shop entirely. (In pic: Indonesia factory) Siswanto / International Labour Organization

Almost everyone, save US President Donald Trump's own loyal and die-hard base, are agreed on the adverse impact that the tariffs announced by him a week ago would have on economic growth and investments around the world, particularly affecting low-income and vulnerable economies of the Global South. Many of these low-income, export-oriented economies are heavily dependent on the US market, and livelihoods here are as much at stake.

The ripple effects of the sweeping tariff hikes will soon be felt far beyond edgy boardrooms and uneasy stock exchanges, and there are sporadic reports of this already starting to take effect. For hundreds of thousands of garment workers—many in the factories across South and Southeast Asia, and Africa to a lesser extent—the arbitrary spike in trade tariffs will be a matter of life and death.

Reports have been gradually trickling in about orders being slashed and hiring frozen. There are fears—not entirely unfounded—that factories would be forced to either downsize or shut shop entirely. The far-reaching tariffs, framed by the US administration as an attempt to protect American manufacturing as well as US workers, are ironically throwing global apparel supply chains into disarray spelling doom for hundreds of thousands of workers across geographies.

The initial reactions

Nonprofit Cascale, known earlier as the Sustainable Apparel Coalition, has expressed concern over the human impact of the US tariffs. It said: "While the economic and logistical impacts are significant, it is essential we also recognize the profound human implications of these tariffs. Thousands of workers and their families across developing countries like Vietnam, Bangladesh, India, Cambodia, and China rely on the textile and apparel industry for their livelihoods. Sudden disruptions caused by these tariffs could undermine decades of progress in social and economic stability, pushing vulnerable communities deeper into poverty."

The Clean Clothes Campaign network has urged US and global garment companies to ensure that "the costs for these new policies are not offloaded on those that can least afford it, the workers, and instead to absorb costs themselves rather than pushing them down the supply chain."

While the apprehensions expressed by the Clean Clothes Campaign are well-grounded, what is known so far is sketchy. What will eventually transpire hinges heavily on which way negotiations between governments of these apparel-producing countries and the Trump administration go.

Subir Ghosh

SUBIR GHOSH is a Kolkata-based independent journalist-writer-researcher who writes about environment, corruption, crony capitalism, conflict, wildlife, and cinema. He is the author of two books, and has co-authored two more with others. He writes, edits, reports and designs. He is also a professionally trained and qualified photographer.

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What is known so far is this:

The Tamkeen for Legal Aid and Human Rights has issued a report warning of the economic and social repercussions stemming from the decision to impose a 20 per cent tariff on Jordanian exports. The Jordanian garment and textiles sector accounts for $1.75 billion in exports. A decline in production and exports could lead to the loss of thousands of jobs, with initial estimates suggesting that a 20–30% drop in exports may result in the loss of 10,000-15,000 direct jobs. This impact will be particularly severe for women, who make up more than 60% of the workforce in this sector.
A garment exporter in Bangladesh told the Independent that his company, which employs 3,200 factory workers, was bracing for order cancellations as rising costs for buyers could spell the end of Bangladesh's competitive edge. The ready-made garment industry is central to his country’s economy, accounting for more than 80% of total export earnings, employing 4 million people, mostly women, and contributing roughly 10 per cent to its annual GDP.
A France 24 analysis of Nike’s production ecosystem showed that of the 528 factories contracted by footwear and apparel major to produce finished goods in 37 countries and regions across the world, just 28 are based in the US. These directly employ some 4,000 workers—a figure that, presented on Nike’s own interactive Manufacturing Map as a percentage of the total workforce of 1,149,901, is rounded off to 0%. Most of the rest are in Asia. If Nike alone were to be hit, the impact on jobs would be colossal. Unless, of course, these countries mend fences with the Trump administration.
A news report from Bangladesh claimed that Walmart, Levi's and Gap, among others, had asked Bangladeshi suppliers to temporarily halt shipments until 10 April, as they awaited clarity on Trump's possible decision to go easy on Bangladesh. One major US buyer was reported to have instructed its suppliers to absorb the additional duty burden. There were also reports that some buyers—particularly smaller ones—have been pushing suppliers to either pay the full tariff or share the burden.

Whether there would be a spate of order cancellations as had happened during the COVID-19 lockdowns—as Clean Clothes Campaign fears—remains to be seen. Life has not come to a standstill because of the tariff hikes and cancellation of orders on force majeure grounds is unlikely. US-based apparel buyers, however, can still ask for delays (in expectation of favourable deals) or discounts. If apparel factories are squeezed, they are likely to recover margins from their own employees. "As current pricing is already insufficient to guarantee workers living wages and decent working conditions, it is clear where the price for such forced discounts eventually will be paid: by the workers," Clean Clothes campaign has rightly pointed out.

A news report from Bangladesh claimed that Walmart, Levi's and Gap, among others, had asked Bangladeshi suppliers to temporarily halt shipments until 10 April, as they awaited clarity on Trump's possible decision to go easy on Bangladesh. Siswanto / International Labour Organization

Whether there would be a spate of order cancellations as had happened during the COVID-19 lockdowns—as Clean Clothes Campaign fears—remains to be seen.

On their watch Whether there would be a spate of order cancellations as had happened during the COVID-19 lockdowns—as Clean Clothes Campaign fears—remains to be seen. International Labour Organization

If a particular apparel-making country is unable to secure a deal from the Trump administration, it would make business sense for US brands and retailers to shift their manufacturing bases, either by reshoring to US soil (as Trump apparently wants) or nearshoring to Central American countries like Honduras or El Salvador (which face only the baseline 10% tariffs), or even Mexico (which does not have new tariffs over and above the ones imposed earlier this year). Should either of these happen, many garment factories in the South and Southeast Asian countries would have to close shop.

This too was pointed out by Clean Clothes Campaign: "Also employer federations in several garment producing have already started threatening with repercussions, and fallen into the trap of fostering regional competition. Under threat that jobs will be relocating to other countries less affected by the tariffs, cuts on wages and increased working hours are suggested. It is important that workers in garment producing countries stand together in a shared approach to address this issue."

The other workers

There is, however, a blind spot to all this.

All labour-related activism of organisations like Clean Clothes Campaign, IndustriALL and Fashion Revolution, is confined to garment workers. But there are hundreds of thousands of workers in other sectors of this industry.

According to the last Textile and Apparel Import Report issued by the Office of Textiles and Apparel (OTEXA), apparel imports account for less than a third of the total industry imports in terms of volume. How the new tariffs are going to affect the yarn, fabrics, made-ups and non-apparel segments is not quite known. Also unknown, for that very reason, would be how workers in these sectors would be affected. The gap in the narrative would need to be filled by someone.

If a particular apparel-making country is unable to secure a deal from the Trump administration, it would make business sense for US brands and retailers to shift their manufacturing bases, either by reshoring to US soil (as Trump apparently wants) or nearshoring to Central American countries like Honduras or El Salvador (which face only the baseline 10% tariffs), or even Mexico (which does not have new tariffs over and above the ones imposed earlier this year).