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To safeguard orders and relationships, many suppliers are said to have accepted lower prices or offered discounts, effectively taking on part of the tariff burden.<\/p>\n
Bangladesh garment exporters reportedly cut prices or offered discounts to retain US orders after the tariff shock, absorbing part of buyers’ higher import costs.
\nUS importers of record, not Bangladeshi suppliers, are in line for refunds on invalidated IEEPA duties, leaving factories reliant on negotiations.
\nRelief is expected via future price hikes, larger orders or freight-cost concessions. <\/p>\n
For those exporters, it was a calculated trade-off: absorb some of the cost or risk losing business in a highly competitive market. As expected, they chose to protect their orders, hoping the pressure would eventually ease.<\/p>\n
That moment has now given way to a very different scenario, as US importers begin receiving refunds on duties paid under the now-invalidated IEEPA tariffs.<\/p>\n
On paper, this looks like good news for those Bangladeshi apparel exporters. In practice, however, getting that money back to the factories, which helped shoulder the tariff cost, could prove far more challenging.<\/p>\n
The key question for Bangladeshi suppliers is therefore not simply whether IEEPA duties will be refunded, but whether\u2014and how much of\u2014those refunds will flow back through commercial relationships to the suppliers that absorbed part of the tariff burden.<\/p>\n
According to industry stakeholders, the first hurdle is legal. US importers of record, not Bangladeshi suppliers, generally paid the customs duties. As a result, the refund mechanism naturally puts the importers of record in line to receive the money. Bangladeshi suppliers, meanwhile, have no direct claim and must rely on commercial negotiations with their customers.<\/p>\n
Suppliers operating under arrangements such as Landed Duty Paid terms may have a stronger basis for recovery; nevertheless, felt some.<\/p>\n
This creates a crucial disconnect between who receives the refund and who actually bore the cost. Many Bangladeshi factories may have absorbed tariffs through lower prices and discounts, but establishing exactly how much each supplier sacrificed is far from straightforward.<\/p>\n
Media reports suggest industry bodies also lack comprehensive transaction-level data showing the precise financial burden carried by individual suppliers. Without that evidence, securing a fair share of the refunds becomes less an exercise in accounting and more a test of bargaining power, some stakeholders believe.<\/p>\n
And that is where the real imbalance emerges. Retailers and brands generally have greater negotiating power in a highly competitive sourcing market and may have limited commercial incentive to return refunds in cash.<\/p>\n
The more likely outcome, hence, is a slower, negotiated recovery through higher prices on future orders, increased volumes or freight-cost concessions. But such relief comes gradually, remains tied to future business, and may never fully compensate suppliers for what they have already borne, many within the industry held.<\/p>\n
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Fibre2Fashion News Desk (DR)<\/p>\n
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