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Bangladesh’s export-driven economy is facing a looming employment crisis, as the United States prepares to impose a 35% countervailing duty on imports from the country starting August 1.

Industry leaders are warning that the impact could be devastating, extending far beyond the readymade garment (RMG) sector to disrupt related industries such as leather, plastics, agriculture, logistics, and financial services.

Without immediate and coordinated government intervention, stakeholders fear the loss of Bangladesh’s competitive edge in the US market—an outcome that could result in the loss of over a million jobs within months.

“This is no longer just a trade issue—it’s a national emergency,” said Shovon Islam, Managing Director of Sparrow Group. “If we assume only US-bound RMG exports will be hit, we are gravely mistaken. Buyers source for multiple markets from a single country, and the effects will ripple across the entire economy.”

The US accounts for nearly $10 billion of Bangladesh’s annual exports, including apparel, leather goods, plastic products, and agro-based items. Data from the National Board of Revenue shows that 2,377 Bangladeshi firms exported to the US in FY25, with 801 depending on the market for over half of their total export revenue.

Industry insiders estimate that if the tariff is implemented, order volumes could decline rapidly, putting up to 1.5 million jobs at risk—both directly in RMG and indirectly across backward-linkage and support sectors.

Sparrow Group, which employs 18,000 workers and exports $300 million annually—half to the US—says it may not survive more than two months if orders collapse.

Similarly, Asian Group, a Chattogram-based exporter, sends 93% of its $340 million annual shipments to the US. Executive Director Khondaker Belayet Hossain said the company pays Tk 600 million in monthly wages and is already facing buyer uncertainty. “Walmart continues placing current orders, but future seasons remain in doubt,” he added.

Larger exporters like Ha-Meem Group, which pays Tk 900 million in monthly wages, could also see as many as 70,000 jobs threatened if the situation deteriorates.

Retail giants including Walmart, Gap, Levi’s, American Eagle, and C&A—whose combined annual sourcing from Bangladesh exceeds $5 billion—are reportedly reconsidering their future orders. Some buying houses have asked factories to delay production and shipments.

The consequences could cascade across the supply chain. Backward-linkage sectors such as spinning, dyeing, accessories, and chemicals—which rely heavily on export volumes—may be forced to reduce operations or shut down.

Thousands of jobs in domestic logistics and transport—freight forwarding, clearing and forwarding (C&F) agents, and warehouse operators—are also in jeopardy if order volumes fall.

The financial sector isn’t immune either. A senior official at a commercial bank warned, “Trade disruptions impact loan performance. Exporters rely heavily on back-to-back LCs and factoring, which would face strain if US orders shrink.” Insurers, too, anticipate reduced premiums for marine and export-credit policies.

Even local SMEs supplying to export-oriented factories are bracing for the worst, fearing they may be the first to shut down amid declining demand.

Experts argue that part of the vulnerability stems from Bangladesh’s failure to secure preferential access to the US market—unlike Vietnam, India, and Sri Lanka, which have offered strategic imports such as LNG or cotton in return for trade relief.

“We failed to make reciprocal offers in negotiations,” said Sparrow Group’s Islam. “Countries like China saw exports to the US fall by over $100 billion under the Trump-era tariffs. Bangladesh could face a similar fate.”

He called for urgent high-level diplomatic efforts and suggested dispatching economists and experienced business leaders to Washington to pursue a resolution before the new tariff is implemented.

On Tuesday, following a meeting with business leaders, BNP Standing Committee member Amir Khasru Mahmud Chowdhury urged the government to strengthen its negotiations with the US through collaboration with business groups, industry leaders, and political parties.

“If not addressed swiftly, the tariff could cripple our export sector, jeopardizing over $8 billion in earnings and at least 1.5 million jobs,” he said. “This is a national issue that demands political consensus and immediate action.