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Wall Street Journal
6 hours ago
- Business
- Wall Street Journal
Q&A: Why Trump Hit Poorer Countries With Higher Tariffs Than Rich Ones
A garment factory in Ho Chi Minh. Low wages have helped turn Vietnam and Bangladesh into manufacturing powers. (Linh Pham/Bloomberg News)
Times of Oman
02-08-2025
- Business
- Times of Oman
India's garments sector faces tariff challenge, country needs bold reforms: GTRI's Ajay Srivastava
New Delhi: With the US administration under President Donald Trump imposing 25 per cent tariffs on Indian goods plus an unspecified 'penalty', India's textile and garment sector is likely to face stiff competition from Bangladesh and Vietnam, who have been hit with comparatively lower tariffs, Ajay Srivastava, founder of trade think tank Global Trade Research Initiative (GTRI), has said. "Bangladesh and Vietnam are big players in garment exports and have a better tariff position than India. This puts our textile and garment industry at a disadvantage. The same concern extends to leather goods," Srivastava told ANI in a product-wise analysis of the US tariff impact. While labour-intensive sectors like textiles and leather are expected to feel the heat, India's auto components, steel, and aluminium industries are likely to remain relatively unaffected, as the tariff levels on these items are broadly comparable across competing nations, he argued further. Critical sectors such as pharmaceuticals, electronics (including smartphones), and petroleum products have been kept exempt from the fresh tariff measures, he claimed. Overall, India has a 6-8 per cent disadvantage in comparison to other key Asian countries competing for market share in the US, according to Srivastava. To deal with this challenge, Srivastava argued that India must move beyond tariff negotiations and trade agreements, and instead focus on bold domestic reforms. "If we manufacture good quality products at competitive prices, they will sell -- with or without a trade deal. Look at China, it exports massively without relying on trade agreements," he said. He recommended a strong focus on reducing the cost of manufacturing and improving ease of doing business. "Internal reforms are now essential. It's time for serious measures," he added. Srivastava also cited the European Union's upcoming Carbon Border Adjustment Mechanism (CBAM), effective from 2026, as an example of growing global protectionism. He suggested India diversify revenue sources by boosting tourism, which he said could offset tariff-related export losses. "Tourism has the potential to generate double the revenue we may lose from US tariffs," he said. Over the past few months, India and the US have been negotiating for an interim trade deal, but there were some reservations from the Indian side on the US demand for opening up the agricultural and dairy sectors. Agriculture and dairy are critical for India as these two sectors provide livelihood opportunities to a large section of people. On Wednesday, President Trump announced the imposition of 25 per cent tariffs on Indian goods plus an unspecified penalty, even as there were hopes of an interim India-US trade deal that would have otherwise helped avoid elevated tariffs. India and the US initiated talks for a just, balanced, and mutually beneficial Bilateral Trade Agreement (BTA) in March this year, aiming to complete the first stage of the Agreement by October-November 2025. On April 2, 2025, President Trump signed an executive order for reciprocal tariffs on various trade partners, imposing varied tariffs in the range of 10-50 per cent. He subsequently kept the tariffs in abeyance for 90 days, while imposing a 10 per cent baseline tariff. The deadline was to end on July 9, and the US administration later pushed it to August 1. US President Donald Trump had imposed reciprocal tariffs on dozens of countries with which the US has a trade deficit. Since assuming office for his second term, President Trump has reiterated his stance on tariff reciprocity, emphasising that the United States will match tariffs imposed by other countries, including India, to "ensure fair trade".
Reuters
01-08-2025
- Business
- Reuters
Exclusive: Cambodia deputy PM says 19% US tariff rate averts collapse of its garments manufacturing sector
Aug 1 (Reuters) - A tariff rate of 19% on Cambodia's exports to the United States has helped it avert the collapse of its vital garment and footwear sector, allowing the country to remain competitive with its peers, its deputy prime minister told Reuters on Friday. Sun Chanthol, Cambodia's top trade negotiator, thanked U.S. President Donald Trump for his understanding in Cambodia's negotiations to reduce a tariff rate that had initially been set at 49% then later 36% - among the world's highest levies - and for his intervention in a deadly conflict between Thailand and Cambodia. "First off the bat I have to thank President Trump for providing a rate that's competitive vis-a-vis our neighbouring countries and express gratitude to President Trump for his noble intervention for a ceasefire and peace," Chanthol said in a phone interview. "If the U.S. maintained 49% or 36%, that industry would collapse in my opinion," he said of the garment and footwear manufacturing sector, the biggest economic driver in the country of 17.6 million people. "People would go to Indonesia, Vietnam ... a 16% difference would have been huge. We can live with 5%, anything around that. We are very grateful, for protecting our industry and its employees." "We have close to 1 million workers, mainly women, each one of those workers supporting 4-5 members of their family. It would have been a huge impact if this would have been bad," he added. Cambodia has a big trade surplus with the United States, with its exports to the U.S. market accounting for 37.9% of its total shipments in 2024, valued at close to $10 billion, according to official data. Much of that was textiles and shoes, a sector crucial to an economy projected by the International Monetary Fund to reach $49.8 billion this year, driven by manufacturing of goods for brands that include Adidas, H&M, Ralph Lauren and Lacoste. The deputy premier said what had been agreed with Washington was a framework, with a deal to be finalised later. Chanthol also said Cambodia had agreed as part of the deal to buy 10 Boeing (BA.N), opens new tab 737 MAX 8 aircraft for its national carrier Air Cambodia, with the option to purchase another 10. "We don't have a lot of purchasing power compared to other countries," he said. "Our approach was we put everything on table, negotiate in good faith, ensure both countries will benefit from this trade deal."
Yahoo
30-07-2025
- Business
- Yahoo
Why Central America is Central to Hansae's Multi-Country Manufacturing Strategy
The Western Hemisphere is heating up as a sourcing destination, as American companies seek out production closer to home. Nearshoring ticks numerous boxes for brands. Firstly, it shortens lead times, enabling quicker replenishment and allowing for more responsive production runs. By reducing the distance that goods must travel, importers simultaneously minimize logistics and transportation risks. Additionally, working with nearby partners in similar time zones improves collaboration. For American brands, one of the key nearshoring regions is Central America, which is covered by the Dominican Republic-Central America Free Trade Agreement (CAFTA-DR). Per the United States Fashion Industry Association's 2024 Benchmarking Report, 52 percent of companies said they planned to expand sourcing from CAFTA-DR member countries in the next two years, up from 40 percent in 2023. More from Sourcing Journal Jeanologia Bridges Design and Manufacturing in Miami How TENCEL™ Lyocell Fibers with Micro Technology Provide Premium Comfort INTERFILIERE SHANGHAI'S Silk Zone to Boost Understanding of Elegant Yet Versatile Material Responding to this increasing interest, textile and garment manufacturing group Hansae has made Central America a key investment area. Headquartered in South Korea, the company has factories in eight countries, including Guatemala, El Salvador, Nicaragua and Haiti. Hansae is continuing to enhance its facilities in the region to better serve Western Hemisphere customers with more capacity, verticality and technology. 'Through strategic investments and operational upgrades in Nicaragua and El Salvador, Hansae is further strengthening its position as a trusted manufacturing partner for leading U.S. brands,' said Jun Chung, vice president of strategy and planning at Hansae. Hansae's longest foothold in Central America has been Nicaragua, which it entered in 1998. Expanding its capacity in the country, Hansae will be adding 60 sewing lines to its plant in SEBACO by the second quarter of 2026. A key focus within Hansae SEBACO is automation. The facility leverages technology and innovations from Hansae's factories across the globe, particularly Vietnam. In addition to automated sewing and cutting machines, the plant incorporates automated hanger systems, guided vehicles, box-making machines and box-folding machines for efficiency. Further streamlining production, the SEBACO plant has a partner print mill in the same complex as the garment factory, allowing high-quality embellishments like printing, dyeing and embroidery to be added to garments on site. Although the infrastructure for embellishments is developing in Central America, capacity remains tight and certain specialized capabilities such as flocking and multi-layered screen printing are still largely concentrated in Asia. With this co-located print mill, Hansae is helping to expand the capabilities available in Nicaragua and the region. While Hansae has been in Nicaragua the longest, the company's youngest base in the region is in El Salvador. Established in 2024, the group's presence in the country spans an owned facility with 22 sewing lines and a partnership with an outsourcing factory in the Sam-Li Industrial Zone, which has 25 lines. Hansae had multiple reasons for entering the nation. 'El Salvador offers excellent logistics connectivity, including a regional airport hub, and it benefits from a strategic partnership with the national investment agency,' said Chung. 'With a growing economy and improving infrastructure, El Salvador presents strong synergy potential for future verticalization and sustainable manufacturing investment.' At a country-wide level, El Salvador is also undergoing reforms. President Nayib Bukele—who took office in 2019 and was re-elected in 2024—has cracked down on crime and gang violence. Despite some controversy surrounding the methods used, they have resulted in extreme reductions in violent crimes, with annual reported homicides declining from over 1,000 in 2021 to 114 in 2024. Another attraction for El Salvador is favorable duty rates, since the nation has not been a target for the Trump administration's widespread reciprocal tariffs. Compared to heftier duties placed on some nations' U.S.-bound exports, El Salvador-origin goods are only subject to the baseline 10 percent tariff. Hansae's latest investments in Central America complement its wider Western Hemisphere expansion. Adding verticality, Hansae acquired California-based fabric mill Texollini last year. With capabilities including in-house knitting, research and development, dyeing, printing and finishing, the Long Beach mill will provide synthetic fabrics for Hansae's activewear, intimates and swimwear manufacturing in the Western Hemisphere. In other vertical moves, Hansae linked up with Imperial Group in Guatemala to provide a pipeline of locally sourced textiles for its factories in the region. Additionally, Hansae will be opening a factory in Michatoya Industrial Park in Guatemala in the third quarter of 2026, growing its production hubs in the region. 'Hansae continues to expand its multi-country manufacturing model, anchored in regional vertical capabilities and innovation-led investments,' said Chung. 'With ongoing investments in automation, embellishment and synthetic fiber integration, Hansae is building the foundation for its next phase of competitive manufacturing leadership.' Click here to learn more about Hansae. Sign in to access your portfolio
France 24
08-07-2025
- Business
- France 24
Major garment producer Bangladesh seeks deal after 35% US tariff
Textile and garment production accounts for about 80 percent of exports in Bangladesh and the industry has been rebuilding after it was hit hard in a student-led revolution that toppled the government last year. "There is a hope for getting a reduced rate of tariffs as USTR (Office of the United States Trade Representative) sent another draft document for review," Commerce Secretary Mahbubur Rahman told AFP. Rahman said the South Asia nation's national security adviser and commerce adviser were "working on the issue" in the United States. Bangladesh exported $8.36 billion worth of goods to the United States in 2024, while imports from there amounted to $2.21 billion, according to the Bangladesh Bank and the National Board of Revenue. US clothing companies that source products from Bangladesh range from Fruit of the Loom to Levi Strauss to VF Corp -- whose brands include Vans, Timberland and The North Face. Trump hit Bangladesh with 37 percent tariffs in an April 2 announcement, but in a letter issued Tuesday, the US leader said it would now be 35 percent. That is more than double the 16 percent already placed on cotton products. Dhaka has proposed to buy Boeing planes and boost imports of US wheat, cotton and oil in a bid to reduce the trade deficit, which Trump has used as justification for imposing painful levies. Mahmud Hasan Khan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), called it "a big challenge for the garment sector". "We had expected the tariff imposed on us to be between 10 to 20 percent," he said, adding he expected Dhaka's interim leader Muhammad Yunus to "raise the issue with the United States". Former BGMEA director Mohiuddin Rubel warned the impact as tariffs stand would be dire. "The new tariffs raise worries about job losses in Bangladesh as the US is its main export market," he said. © 2025 AFP
