The Textile Industry In South Asia Will Be Fatally Impacted By The Imposition Of Tariffs By The United States

Recently, the US government announced a series of tariff policies, imposing "equivalent tariffs" on all imported goods. "Equivalence tariff" has a wide range of targets, including small and weak economies identified by the United Nations as "least developed countries", as well as countries suffering from wars and terrorist threats. The Trump government's tariff policy has a huge impact on the economic and trade pattern of South Asia, and the textile industry of India, Bangladesh, Sri Lanka, Pakistan and other countries has been seriously affected.

India is the largest economy in South Asia and the main trading partner of the United States. The United States, as its main export destination, accounts for about 18% of India's foreign trade. Indian Foreign Minister Su Jiesheng said that India has a clear strategy and will consult with the United States on bilateral trade issues, and is expected to reach an agreement this autumn. In order to reach a bilateral trade agreement, India must reduce tariffs on imports from the United States. India will have an impact on the survival and development of its domestic related industries at the expense of domestically manufactured goods.

Bangladesh's economy is highly dependent on the export of garment manufacturing industry. The United States is its important export market, with an annual export volume of 7 billion US dollars, accounting for 80% of Bangladesh's total exports. Industry experts in Dhaka worry that the sharp increase in tariffs may weaken Bangladesh's competitive advantage, and lead to a sharp reduction in Bangladesh's garment export orders, factory production reduction, layoffs, and upstream and downstream industries such as textile, printing and dyeing will also be affected. The garment industry is associated with many jobs and creates 8 million jobs for Bangladesh every year. The reduction of orders will directly affect the social stability and economic development of Bangladesh.

"For Bangladesh, this transformation poses a major challenge because under such an uncertain system, they may face more difficult economic conditions," Selim Lehan, executive director of the South Asia Economic Modeling Network, wrote on social media. The Bangladeshi government took the reduction of import tariffs on some US goods as a response measure, and the Secretary of Commerce also urgently negotiated with the US side, but the effect and negotiation prospect were not clear.

Sri Lanka's main export industries - clothing, rubber and plastic exports, as well as other manufactured goods, such as Christmas decorations, brooms and brushes and chemical products, will be seriously affected. The spillover effect of the tariff war will also have a negative impact on Sri Lanka. EU countries are expected to suffer a serious economic recession, and their economic contraction will significantly reduce imports from Sri Lanka. This will further exacerbate Sri Lanka's foreign exchange shortage, expand its trade deficit, threaten employment and hinder the process of economic recovery.

Facing the severe situation, the Sri Lankan government has set up a task force to study countermeasures, but it is difficult to find effective solutions in the short term. The Sri Lankan government appeals to the international community to pay attention to its plight and hopes to urge the United States to reconsider the high tariffs imposed on it through multilateral or bilateral consultation mechanisms.

The textile industry is Pakistan's pillar industry, accounting for 57% to 60.8% of total exports. The United States is its second largest export destination after the European Union. According to the prediction of Pakistan's research institute, under the influence of the new US tariff, Pakistan's export loss in fiscal year 2026 will reach about 564 million dollars, and in the worst case, the loss may exceed 2 billion dollars. In addition, it may also lead to less investment in the industry and forced to shelve plans for enterprise expansion and technology upgrading. In order to mitigate the tariff impact, the Pakistani government, on the one hand, encourages enterprises to expand into other international markets and reduce their dependence on the US market; On the other hand, actively communicate with the US government to seek ways to solve the tariff problem through trade negotiations. However, the development of the international market was not achieved overnight, which required a lot of time and capital investment, and the trade negotiations with the United States also progressed slowly.

The Trump administration's "reciprocal tariff" policy has a broad and profound negative impact on the economy and trade of South Asian countries. But in the long run, it may also promote South Asian countries to accelerate market diversification and industrial upgrading, reduce their dependence on the United States market, and establish a more balanced trade structure. While actively seeking countermeasures, these countries also expect the international community to work together to maintain a fair and free international trade order and promote the stable development of the global economy.

(Source: Wen Wei Po)