Analysis
US President Donald Trump’s wide-reaching “Liberation Day” tariffs have come crashing down on countries that rely heavily on the export of low-cost garments and textiles to the US. But while the levies seem unlikely to bring textile factories back to the US, they could be devastating for millions of low-wage garment workers already living hand to mouth.
Issued on: 08/04/2025
FRANCE24
By: Paul MILLAR
By: Paul MILLAR
This photograph taken on December 29, 2024, shows garment workers sewing clothes at a Snowtex Group textile factory in Dhamrai, a sub-district in Dhaka. © Munir uz Zaman, AFP
If the mark of a good pair of sneakers is the number of miles they’ve travelled, Nike’s must be top of the line. Of the 528 factories contracted by Nike to produce finished goods in 37 countries and regions across the world, just 28 of those are based in the US. Those factories directly employ some 4,117 workers – a figure that, presented on Nike’s interactive Manufacturing Map as a percentage of the total workforce of 1,149,901, is rounded down to 0 percent.
The rest, most of them at least, are in Asia – part of a decades-long policy of outsourcing production to countries where low wages have allowed the kind of mass production of low-cost clothing and footwear that has become a staple of globalised life. It is these countries – including major producers and exporters such as Bangladesh, Vietnam, China, Cambodia and Indonesia – that supply Western brands with low-cost clothes, shoes and textiles. And it is these countries that have found themselves hit hardest by US President Donald Trump’s sweeping “Liberation Day” tariffs.
Just what will happen to those jobs is anyone’s guess. While Trump has justified his global tariff regime with the promise of bringing manufacturing jobs back to the US, the president has said little about his vision for the labour-intensive production lines built around cutting and sewing low-cost clothes and footwear. But whether those industries can survive in countries hammered by tariffs that could price them out of the lucrative US market remains far from clear.
Mark Anner, dean and distinguished professor at Rutgers’ School of Management and Labor Relations, said that it was hard to imagine that Trump’s tariffs could drive textile production back to the US.
“Of the garments purchased in the US, 97 percent are made outside the US – only three percent of the garments we wear are made within the US,” he said. “So the idea that through this tariff regime, jobs would come back to the US – I just see that as highly unlikely for a whole bunch of reasons.”
If the mark of a good pair of sneakers is the number of miles they’ve travelled, Nike’s must be top of the line. Of the 528 factories contracted by Nike to produce finished goods in 37 countries and regions across the world, just 28 of those are based in the US. Those factories directly employ some 4,117 workers – a figure that, presented on Nike’s interactive Manufacturing Map as a percentage of the total workforce of 1,149,901, is rounded down to 0 percent.
The rest, most of them at least, are in Asia – part of a decades-long policy of outsourcing production to countries where low wages have allowed the kind of mass production of low-cost clothing and footwear that has become a staple of globalised life. It is these countries – including major producers and exporters such as Bangladesh, Vietnam, China, Cambodia and Indonesia – that supply Western brands with low-cost clothes, shoes and textiles. And it is these countries that have found themselves hit hardest by US President Donald Trump’s sweeping “Liberation Day” tariffs.
Just what will happen to those jobs is anyone’s guess. While Trump has justified his global tariff regime with the promise of bringing manufacturing jobs back to the US, the president has said little about his vision for the labour-intensive production lines built around cutting and sewing low-cost clothes and footwear. But whether those industries can survive in countries hammered by tariffs that could price them out of the lucrative US market remains far from clear.
Mark Anner, dean and distinguished professor at Rutgers’ School of Management and Labor Relations, said that it was hard to imagine that Trump’s tariffs could drive textile production back to the US.
“Of the garments purchased in the US, 97 percent are made outside the US – only three percent of the garments we wear are made within the US,” he said. “So the idea that through this tariff regime, jobs would come back to the US – I just see that as highly unlikely for a whole bunch of reasons.”
55 cents an hour
One of the major challenges is likely to be lack of trained – or willing – labour. While 139,000 people worked in apparel manufacturing in the US as of January 2015, according to the Bureau of Labor Statistics, that number had shrunk to just under 85,000 by January this year. A statement by the National Council of Textile Organizations praising Trump’s tariff regime said that the broader US textile sector employed some 471,000 workers – a fraction of the country’s 170 million-strong labour force. What little garment and textile production that has stayed in the US has relied disproportionately on undocumented immigrant labour to keep costs down – the same undocumented workers that Trump has promised to crack down on.
Setting up domestic supply chains would also likely be a high barrier to bringing production back to the US, Anner said.
“Logistically, it's just very difficult. We're talking not just about the factory that sews the garments together, but the need for an entire supply chain to relocate,” he said.
“In terms of cost, one of the major exporters of garments to the US is Bangladesh – I was just doing the math on the hourly rate. You're looking at a minimum wage in the US of $7.25 – that's the federal minimum wage, but many states have higher minimum wages. And we’re talking about four million workers in Bangladesh making garments at 55 cents an hour. I don't know how that gets replicated in the US or moved to the US.”
And while supporters of rebuilding the US manufacturing base often point to higher levels of automation as a way to maintain a competitive edge against low-wage countries, the physical act of cutting and sewing fabric has been notoriously resistant to automation.
Unlike rigid materials such as metal and plastic, fabric shifts and flows like a living thing – and while electric sewing machines have been a staple of garment factories for more than a century, manufacturers still haven’t found a reliable way to wean them off the need for a pair of human hands.
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Uncertainty
The more immediate problem facing businesses is just how seriously to take Trump’s wide-reaching tariffs. The leaders of Vietnam and Bangladesh, both countries heavily dependent on exports to the US, have both pleaded with the US president for a stay of execution.
The Communist Party of Vietnam’s General Secretary To Lam has asked Trump for a 45-day delay so the two countries can strike a deal, insisting that his country is prepared to buy more US goods in exchange for a lower tariff rate. Bangladesh’s interim leader Muhammad Yunus has also said his government is keen to import more US agricultural products in exchange for leniency. Whether or not Trump takes them up on their offer is something the garment sector is watching closely.
“The question is, where do you go if you're tariff shopping? And this is the other part of the story – the uncertainty. If there's one thing that concerns companies as much as cost, it’s uncertainty,” Anner said. “How do you start thinking of investment elsewhere if this could change in a moment's notice?”
Without knowing what respective countries’ tariffs are likely to be in the long-term, he said, it was difficult to imagine that companies would invest the time and capital needed to shift production across the world.
“We're looking at about a 37 percent tariff on Bangladesh, but 26 percent on India, 29 percent on Pakistan and 46 percent on Vietnam – but Vietnam is now looking to reach out and negotiate down,” he said.
“But where would you go? If it was more mobile, maybe you're looking at Bangladesh, you shift to India because it's just under 10 percent lower, or Pakistan – but you don't know who's going to renegotiate, and where this will end up. It's not really clear who might be losing work now.”
The more immediate problem facing businesses is just how seriously to take Trump’s wide-reaching tariffs. The leaders of Vietnam and Bangladesh, both countries heavily dependent on exports to the US, have both pleaded with the US president for a stay of execution.
The Communist Party of Vietnam’s General Secretary To Lam has asked Trump for a 45-day delay so the two countries can strike a deal, insisting that his country is prepared to buy more US goods in exchange for a lower tariff rate. Bangladesh’s interim leader Muhammad Yunus has also said his government is keen to import more US agricultural products in exchange for leniency. Whether or not Trump takes them up on their offer is something the garment sector is watching closely.
“The question is, where do you go if you're tariff shopping? And this is the other part of the story – the uncertainty. If there's one thing that concerns companies as much as cost, it’s uncertainty,” Anner said. “How do you start thinking of investment elsewhere if this could change in a moment's notice?”
Without knowing what respective countries’ tariffs are likely to be in the long-term, he said, it was difficult to imagine that companies would invest the time and capital needed to shift production across the world.
“We're looking at about a 37 percent tariff on Bangladesh, but 26 percent on India, 29 percent on Pakistan and 46 percent on Vietnam – but Vietnam is now looking to reach out and negotiate down,” he said.
“But where would you go? If it was more mobile, maybe you're looking at Bangladesh, you shift to India because it's just under 10 percent lower, or Pakistan – but you don't know who's going to renegotiate, and where this will end up. It's not really clear who might be losing work now.”
Squeezing the workforce
Faced with an uncertain future, garment manufacturers will likely do what they have always done in times of crisis: squeeze. Dina Sidiqqi, an anthropologist at New York University, said that the costs of the tariffs would inevitably be borne by the workers on the production line.
“Additional costs will be absorbed the way they always are – by passing them down to workers,” she said. “Manufacturers do not want to see a dip in their profit levels. They will compensate by reducing the number of workers, and increasing production targets of those who remain.”
Just how much more clothing and footwear companies can cut production costs is unclear, with swathes of the global garment sector built on low-wage mass production. More than four million people are working in Bangladesh’s garment sector alone – the overwhelming majority of them women. Siddiqi said that 40 years of economic activity had had little effect on the wages workers were taking home.
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“Bangladesh’s ‘comparative advantage’ in the global market depends upon the ability to provide the lowest possible cost of labour,” she said. “After four decades of a flourishing sector, Bangladeshi garment workers still have one of the lowest wages in the world – minimum monthly wage for today stands at 12,500 taka ($113 USD), far below the estimated living wage. There is no incentive for capital or the state to increase minimum wages in the current global garment supply chain.”
Anner said that without committing to moving production, competing on cost was the only option left to companies.
“In the garment sector historically, there's two ways to do that: to squeeze down on wages and to squeeze through productivity quotas – so, how fast you have to work, how many operations you need to do, how many collars you sew on per hour,” he said. “And that can go from 80 to 85 to 90, 92 (collars), and so on.”
Passing on the price hike
Although major companies have more leeway to lean on suppliers to squeeze production costs, brands and retailers have already warned that they’re prepared to pass the added costs of the tariffs on to consumers.
The Footwear Distributors and Retailers of America – of which Nike is a member – has said that a $155 running shoe made in Vietnam would have to be marked up to $220 in US stores to compensate for the 46 percent tariff. Roughly half of Nike’s footwear is made in Vietnam.
“It's not clear to me what percentage brands will take out of their margins and what percentage will be passed on to consumers,” Anner said. “But something will be passed on to consumers, and we know that would lead to a decline in demand, which would lead to a decline in the size of production orders, which would mean less workers would be needed – so we could see dismissals or cutbacks in hours as a result.”
The result, Siddiqi said, could well be the kind of economic chaos not seen in the sector since the height of the global Covid-19 pandemic.
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“The pandemic made it clear that the global garment supply chain privileges brands and retailers, recalling older colonial relationships,” she said. “European and US brands were able to legally extricate themselves from contractual obligations once demand for clothing in their markets plunged, leaving manufacturers in the global South in the lurch. Factories closed down and hundreds of thousands of workers lost employment."
“The lesson, in other words, is that the model of low wage export-oriented manufacturing – in an unequal global economic order – leaves countries like Bangladesh deeply vulnerable to the vagaries of the market. The system distributes risks embedded in supply chains unevenly and downward.”
Should these tariffs become a permanent fixture of the world’s economy, she said, the global division of labour that has drawn millions of workers to production lines across South and Southeast Asia could be damaged beyond recognition.
“The consequences for workers and their families would be devastating, if brands withdraw orders from Bangladesh and place them elsewhere,” she said. “The ripple effects include having to withdraw children from schools and put them to work, and to forgo basic healthcare."
“As happened with the boycotts in the 1990s and during the pandemic, in the absence of any insurance [or] social security, workers will face a dismal immediate future.”
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