Asian garment industries raise alarms over higher US tariffs
DHAKA/PHNOM PENH: Across Asia, unions and industry groups are raising alarms over the impact of higher tariffs by the United States on garment workers. High tariffs might force companies to shut down or move to neighboring countries that offer lower tariff rates, resulting in a loss of jobs, they say.
'The potential loss of jobs will cut the income and ability for workers to sustain their daily lives,' said Ath Thorn, vice president of the Coalition of Cambodian Apparel Workers' Democratic Union, which represents 80,000 workers across 40 factories. Several countries in Asia have gotten notice of new tariff rates imposed by the United States to take effect August 1, after a 90-day pause on tariffs came to an end.
Manufacturing hubs such as Bangladesh and Cambodia will face high tariffs of 35 percent and 36 percent respectively, while neighboring countries are still negotiating with the US government. US President Donald Trump announced new tariffs through official letters posted on his social media platform, Truth Social, on July 8.
The US is the largest garment export destination for Bangladesh. The country's exports to the US totaled $8.4 billion last year and of that, garments comprised $7.34 billion. Also in 2024, Cambodia exported nearly $10 billion worth of goods to the US, which accounted for nearly 40 percent of the nation's total exports, according to government customs statistics.
More than half of US imports from Cambodia were garments, footwear and travel goods such as luggage and handbags, a sector that makes up nearly half of the country's export revenue and employs more than 900,000 workers. Unions and industry groups warn that these workers could be hit hard with job losses if the high tariffs force companies to move to countries under lower tariff rates or shut down altogether.
While Cambodia is looking at a tariff rate reduction from 49 percent in April, anxiety permeates its garment industry, which employs hundreds of thousands of people and is one of the developing nation's key economic pillars. Meanwhile, the US and Vietnam have struck a trade agreement that set 20 percent tariffs on Vietnamese goods. With a neighbor next door with a significantly lower tariff, many companies may choose to leave Cambodia, said Yang Sophorn, president of the Cambodian Alliance of Trade Unions, which represents thousands of women who support their families as garment workers.
The fear is echoed by experts in Bangladesh, which faces a 35 percent tariff. Selim Raihan, a professor of economics at the Dhaka University, said if tariff rates on Bangladesh's competitors like India, Indonesia and Vietnam prove to be lower, Bangladesh would face a serious competitive disadvantage.
Such a disadvantage could make supply chain decision-making more difficult and erode the confidence of buyers and investors, Raihan said. 'As production costs rise and profit margins shrink due to the tariff, many garment factories may be forced to scale back operations or shut down entirely,' Raihan said. In Bangladesh, the 35 percent tariff announced by the U.S. is more than twice the current 15 percent rate on Bangladeshi goods.
'With more than doubling tariff rates, can you imagine how the cost of the products will rise?' asked Mohiuddun Rubel, a former director of Bangladesh's garment manufacturers' association BGMEA and now additional managing director at textile maker Denim Expert Ltd.
The question is what happens to the tariffs for main competitor countries like India and Pakistan, said Rubel. The US is negotiating a trade deal with India, while reciprocal tariff rates for Pakistan have not been announced yet.
Outsized effect on women
Potential layoffs within the garment industry will have an outsized effect on women workers, which Sophorn said would cripple entire families. 'If these women lose their jobs because high tariffs force factories to shut, it will not only impact Cambodia's economy, but now children may not be able to go to school and aging parents may not be able to afford medicine,' Sophorn said.
'The situation for women garment workers is already bad, but it will get worse if these tariffs were to come into effect.' Many of the women she represents have taken bank loans to support their families and work in the garment industry to pay off their debts.
'If they lose their job, it means they will lose everything,' Sophorn said. Tariffs would directly affect a sizable chunk of the four million workers in Bangladeshi's garment industry, most of whom are women from low income and rural backgrounds, Raihan said. Thorn suggested Cambodia continue negotiations to get the tariffs down or find other ways to export more products, generate more income and create more work. 'If not, we will face problems,' he said. — Reuters
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Kuwait Times
4 hours ago
- Kuwait Times
Trump signs stablecoin law
Crypto industry aims for mainstream adoption WASHINGTON: US President Donald Trump on Friday signed a law to create a regulatory regime for dollar-pegged cryptocurrencies known as stablecoins, a milestone that could pave the way for the digital assets to become an everyday way to make payments and move money. The bill, dubbed the GENIUS Act, passed in the House of Representatives by a vote of 308 to 122, with support from nearly half the Democratic members and most Republicans. It had earlier been approved by the Senate. The law is a huge win for crypto supporters, who have long lobbied for such a regulatory framework in a bid to gain greater legitimacy for an industry that began in 2009 as a digital Wild West famed for its innovation and speculative chaos. 'This signing is a massive validation of your hard work and pioneering spirit,' said Trump at a signing event that included dozens of government officials, crypto executives and lawmakers. 'It's good for the dollar and it's good for the country.' Treasury Secretary Scott Bessent, in a statement, said the new technology would buttress the dollar's status as the global reserve currency, expand access to the dollar economy and boost demand for US Treasuries, which back stablecoins. Stablecoins are designed to maintain a constant value, usually a 1:1 US dollar peg, and their use has exploded, notably by crypto traders moving funds between tokens. The industry hopes they will enter mainstream use for sending and receiving payments instantly. The new law requires stablecoins to be backed by liquid assets - such as US dollars and short-term Treasury bills - and for issuers to disclose publicly the composition of their reserves monthly. Crypto companies and executives argue such legislation will enhance stablecoins' credibility and make banks, retailers and consumers more willing to use them to transfer funds instantly. The stablecoin market, which crypto data provider CoinGecko said is valued at more than $260 billion, could grow to $2 trillion by 2028 under the new law, Standard Chartered bank estimated earlier this year. The law's passage culminates a long lobbying effort by the industry, which donated more than $245 million in last year's elections to aid pro-crypto candidates including Trump, according to Federal Election Commission data. The Republican president, who has launched his own coin, thanked executives for their support during the 2024 presidential campaign, saying, 'I pledged that we would bring back American liberty and leadership and make the United States the crypto capital of the world, and that's what we've done.' Democrats and critics have said the law should have blocked big tech companies from issuing their own stablecoins, which could increase the clout of an already powerful sector, contained stronger anti-money laundering protections and prohibited foreign stablecoin issuers. 'By failing to close known loopholes and protect America's digital dollar infrastructure, Congress has risked making the US financial system a global haven for criminals and adversarial regimes to exploit,' said Scott Greytak, deputy executive director of Transparency International US. Big US banks are internally debating an expansion into cryptocurrencies as regulators give stronger backing to digital assets, but banks' initial steps will focus on pilot programs, partnerships or limited crypto trading, Reuters reported in May. Several crypto firms including Circle and Ripple are seeking banking licenses, which would cut costs by bypassing intermediary banks. Backers of the bill have said it could potentially give rise to a new source of demand for short-term US government debt, because stablecoin issuers will have to purchase more of the debt to back their assets. Trump has sought to broadly overhaul US cryptocurrency policies, signing an executive order in March establishing a strategic bitcoin reserve. The president launched a meme coin called $TRUMP in January and partly owns crypto company World Liberty Financial. — Reuters
Kuwait Times
2 days ago
- Kuwait Times
‘Frightening': Trump's historic power grab worries experts
Analysts say Trump is testing the limits of his authority like no other modern US president WASHINGTON: Donald Trump has spent six months testing the limits of his authority like no other modern US president, say analysts — browbeating Congress and the courts in a power grab that may come to define his second term. Since January, the Republican leader has repeatedly pushed to secure more power for himself, calling for judges to be axed, firing independent watchdogs and sidestepping the legislative process. Barbara Perry, a University of Virginia professor and an expert on the presidency, called Trump's successes in shattering the restraints on his office 'frightening.' 'All presidents have been subject to Congress' and the Supreme Court's checks on their power, as well as splits in their own political parties,' she said. 'Trump has faced almost none of these counterpoints in this second term.' It is all a far cry from his first stint in office, when Trump and his supporters believe he was hamstrung by investigations and 'deep state' officials seeking to frustrate his agenda. But those guardrails have looked brittle this time around as Trump has fired federal workers, dismantled government departments and sent military troops into the streets to quell protest. He has also sought to exert his influence well beyond traditional presidential reach, ruthlessly targeting universities and the press, and punishing law firms he believes have crossed him. The US system of checks and balances — the administration, the courts and Congress as equal but separate branches of government — is designed to ensure no one amasses too much power. But when it comes to Trump's agenda — whether ending diversity efforts and birthright citizenship or freezing foreign aid — he has largely dodged the hard work of shepherding bills through Congress. Policies have instead been enacted by presidential edict. Six months in, Trump has already announced more second-term executive orders than any American leader since Dwight Eisenhower in the 1950s. He has even sought to bend the economy to his will, escalating attacks on the chief of the independent central bank in a bid to lower interest rates. Once a robust restraining force against presidential overreach, the Republican-led Congress has largely forsaken its oversight role, foregoing the investigations that previous presidents have faced. That has left the judiciary as the main gatekeeper. But Trump has managed partly to neuter the authority of the federal bench too, winning a Supreme Court opinion that mostly reduces the reach of judges' rulings to their own states. In his first term the high court made Trump immune from prosecution for actions taken as part of his official duties — no matter how criminal. And almost every time Trump has turned to the country's highest legal tribunal to rein in the lower courts in his second term, it has obliged. His long shadow has extended far beyond Washington's institutions, pushing into private realms his predecessors avoided. Trump has picked fights with elite universities, prestigious law firms and the press — threatening funding or their ability to do business. The arts haven't escaped his clunking fist either, with the 79-year-old taking over the running of the Kennedy Center in Washington. Trump has claimed falsely that the US Constitution gives him the right to do whatever he wants as the ultimate authority over government activities. This so-called 'unitary executive theory' was pushed in the 'Project 2025' blueprint for government produced by Trump's right-wing allies during last year's election campaign. Although he disavowed 'Project 2025' after it became politically toxic, Trump's own platform made the same claims for expansive presidential powers. Pessimistic about the other branches' ability to hold the administration to account, the minority Democrats have largely been limited to handwringing in press conferences. Political strategist Andrew Koneschusky, a former senior Democratic Senate aide, believes the checks on Trump's authority may ultimately have to be political rather than legal or constitutional. He points to Trump's tanking polling numbers — especially on his signature issue of immigration following mass deportations of otherwise law-abiding undocumented migrants. 'It's not entirely comforting that politics and public opinion are the primary checks on his power,' Koneschusky said. 'It would be better to see Congress flex its muscle as a co-equal branch of government. But it's at least something.' — AFP
Kuwait Times
2 days ago
- Kuwait Times
In victory for Trump, US Senate passes aid, broadcasting cuts
$9 billion in cuts passes by narrowest possible margin WASHINGTON: The US Senate early on Thursday approved President Donald Trump's plan for billions of dollars in cuts to funding for foreign aid and public broadcasting, handing the Republican president another victory as he exerts control over Congress with little opposition. The Senate voted 51 to 48 in favor of Trump's request to cut $9 billion in spending already approved by Congress. Most of the cuts are to programs to assist foreign countries suffering from disease, war and natural disasters, but the plan also eliminates all $1.1 billion the Corporation for Public Broadcasting was due to receive over the next two years. Trump and many of his fellow Republicans argue that spending on public broadcasting is an unnecessary expense and reject its news coverage as suffering from anti-right bias. Standalone rescissions packages have not passed in decades, with lawmakers reluctant to cede their constitutionally mandated control of spending. But Trump's Republicans, who hold narrow majorities in the Senate and House, have shown little appetite for resisting his policies since he began his second term in January. The $9 billion at stake is extremely small in the context of the $6.8 trillion federal budget, and represents only a tiny portion of all the funds approved by Congress that the Trump administration has held up while it has pursued sweeping cuts, many ordered by billionaire Elon Musk's Department of Government Efficiency, or DOGE. As of mid-June, Trump was blocking $425 billion in funding that had already been appropriated and previously approved by Congress, according to Democratic lawmakers tracking frozen funding. However, Trump and his supporters have promised more of the 'rescission' requests to eliminate previously approved spending in what they say is an effort to pare back the federal government. The House of Representatives passed the rescissions legislation without altering Trump's request by 214-212 last month. Four Republicans joined 208 Democrats in voting no. But after a handful of Republican senators balked at the extent of the cuts to global health programs, Russell Vought, director of the Office of Management and Budget, said on Tuesday that PEPFAR, a global program to fight HIV/AIDS launched in 2003 by then-President George W. Bush, was being exempted. The change brought the size of the package of cuts to $9 billion from $9.4 billion, requiring another House vote before the measure can be sent to the White House for Trump to sign into law. The rescissions must pass by Friday. Otherwise, the request would expire and the White House will be required to adhere to spending plans passed by Congress. Republican 'no' votes Two of the Senate's 53 Republicans - Lisa Murkowski of Alaska and Susan Collins of Maine - joined Democrats in voting against the legislation. 'You don't need to gut the entire Corporation for Public Broadcasting,' Murkowski said in a Senate speech. She said the Trump administration also had not provided assurances that battles against diseases such as malaria and polio worldwide would be maintained. Most of all, Murkowski said, Congress must assert its role in deciding how federal funds were spent. Republican Senate Majority Leader John Thune of South Dakota called Trump's request a 'small, but important step toward fiscal sanity.' Democrats scoffed at that, noting that congressional Republicans earlier this month passed a massive package of tax and spending cuts that nonpartisan analysts estimated would add more than $3 trillion to the nation's $36.2 trillion debt. Democrats charged Republicans with giving up Congress' Constitutionally-mandated control of federal spending. 'Today, Senate Republicans turn this chamber into a subservient rubber stamp for the executive, at the behest of Donald Trump,' Senate Democratic Leader Chuck Schumer of New York said. 'Republicans embrace the credo of cut, cut, cut now, and ask questions later,' Schumer said. The cuts would overturn bipartisan spending agreements most recently passed in a full-year stopgap funding bill in March. Democrats warn a partisan cut now could make it more difficult to negotiate government funding bills that must pass with bipartisan agreement by September 30 to avoid a shutdown. Appropriations bills require 60 votes to move ahead in the Senate, but the rescissions package needs just 51, meaning Republicans can pass it without Democratic support.— Reuters
