"War shock and tariff squeeze push exports into sharp drop", 3 April 2026

Mounting geopolitical tensions in the Middle East, coupled with deepening global economic uncertainty, have pushed Bangladesh's export sector onto a worrying downward trajectory...

Latest data...reveal that merchandise exports fell by a steep 19.78 per cent year-on-year in March, reflecting both external shocks and domestic constraints. Industry insiders say the downturn was partly exacerbated by reduced factory operations during the Eid-ul-Fitr holidays...

However, the impact of the ongoing Middle East conflict has proved far more severe. Disruptions to logistics and heightened uncertainty have significantly reduced the volume of goods transported from factories to ports, slowing shipment flows and delaying deliveries.

The situation has been further compounded by the United States' counter-tariff measures introduced last year. These have led to a marked decline in purchase orders...At the same time, demand from Europe has softened, as Chinese exporters-facing higher tariffs in the US-have redirected goods to European markets at more competitive prices.

Taken together, these pressures have triggered a broad contraction in export orders...

Mohammad Masud Kabir, Managing Director of Motex Group, said many international buyers have either postponed or scaled back orders due to concerns over timely delivery following recent political developments.

"Some buyers are placing smaller orders than usual, while others are holding back altogether," he noted.

He added that changes in global trade dynamics, particularly US tariff policies, have eroded demand across key markets. In the United States, higher import costs have squeezed consumer purchasing power...affecting demand for Bangladeshi garments...

The RMG sector, which accounts for more than 80 per cent of Bangladesh's total exports, has been particularly hard hit, recording seven consecutive months of decline from August to February.

Economists and exporters attribute the slump primarily to weakening global demand, driven by persistently high inflation in major export destinations. This slowdown has directly curtailed order volumes for Bangladeshi manufacturers.

At home, structural challenges have compounded the crisis. Political uncertainty, inconsistent policy signals, infrastructure bottlenecks, and chronic shortages of gas and electricity have all constrained industrial output, preventing factories from operating at full capacity...

Mohammad Hatem, President of the Bangladesh Knitwear Manufacturers and Exporters Association, echoed similar concerns. "Export orders have declined due to weakening global demand and ongoing trade tensions linked to US tariffs," he said...

Adding to the strain, shipping companies are now charging between US$3,000 and US$5,000 per container as risk premiums, significantly raising export costs. Industry players caution that such surcharges could render certain sectors, including processed food exports, commercially unviable...