Fashion
Tariff strategy: Are Chinese manufacturers moving to Bangladesh?
The economic conflict between China and the United States, which began in 2018, has continued to evolve over the years, becoming a defining feature of global trade dynamics. What started as a series of tariffs and trade barriers imposed by Washington on Chinese goods quickly escalated into a full-blown trade war.
Many Chinese companies are investing in Bangladesh to leverage Dhaka’s comparatively lower tariffs and cost-effective manufacturing environment.
Over $160 million in Chinese-backed projects, including garment and accessory factories, are being developed in Bangladesh.
Retaliatory tariffs reached 145 per cent from the US and 125 per cent from China, before reaching a 90-day truce between the two sides.
Though a partial truce in the form of a phase-one agreement was reached in January 2020, the rivalry has intensified again in recent years—especially in 2025, following the return of Donald Trump to the White House for a second term as the President, following which Trump started imposing reciprocal tariffs on countries.
Under the renewed Trump administration, trade tensions were reignited as new tariffs were introduced, not only affecting China but also a host of nations. Both China and the US raised tariffs on each other’s goods to over 100 per cent before briefly stepping back to reduce rates under a temporary truce.
This pause, which was originally scheduled to expire on August 12, was extended by another 90 days until November 10, offering a narrow window for further negotiations. Yet the underlying tensions have remained unresolved. Earlier this year, at the peak of the renewed trade war, the US introduced sweeping retaliatory tariffs of 145 per cent on a broad range of Chinese imports. In response, China retaliated with tariffs reaching 125 per cent on American goods, marking one of the most severe escalations in recent years.
With the threat of steep reciprocal tariffs looming large, Beijing is apparently exploring alternative trade and investment strategies to mitigate risk, and a key part of this strategic pivot seems to be centred on Bangladesh.
Recent developments suggest that China is ramping up investments in Bangladesh as part of a broader plan to establish an alternative production base, potentially enabling Chinese firms to navigate around the US-imposed trade barriers. This trend comes amid Washington’s decision to lower reciprocal tariffs on Bangladeshi exports — Bangladesh secured a 20 per cent tariff rate, comparable to many of its competitors.
However, the availability of affordable manpower and its well-established standing as a manufacturing hub only enhanced the country’s appeal as a destination for manufacturers seeking to hedge against geopolitical uncertainty while also enjoying cost-competitiveness.
The relocation effort appears to be gaining momentum in sectors such as readymade garments and textiles —areas where Bangladesh already holds a competitive edge.
Several Chinese firms have already committed to several large-scale projects in the country, as per reports. Among them, China Lesso Group is reportedly investing $32.77 million in a facility located in the National Special Economic Zone, signalling a long-term manufacturing commitment. Similarly, Kaixi Group is setting up a $40 million apparel and accessories plant within the BEPZA Economic Zone in Mirsarai, a rapidly developing industrial hub.
As per reports, additional investments include Handa (Bangladesh) Garments Co. Ltd, which is channelling $41.3 million into an automated garment manufacturing facility designed to produce 72 million pieces annually. Another notable entrant is Unifa Accessories (BD) Co. Ltd, a joint venture between Chinese and British Virgin Islands stakeholders, which is reportedly investing $48.7 million to manufacture 28 million fashion products a year.
The timing and scale of these investments suggest that China is proactively positioning itself to absorb future trade shocks, particularly those that may arise if the United States imposes further punitive measures after the current tariff reprieve ends. By expanding its footprint in Bangladesh, Chinese firms can continue accessing the lucrative US market through a more favourable trade corridor, thereby insulating themselves from the impacts of higher tariffs.
In light of these developments, the China-Bangladesh trade axis is apparently emerging as a critical component of Beijing’s broader strategy to navigate the complexities of the US-China economic standoff. With Bangladesh offering a combination of tariff advantages, a growing industrial base, and affordable labour, it presents a viable solution for Chinese manufacturers to mitigate the risks posed by an increasingly protectionist US trade policy.
As the November deadline approaches, the investment surge into Bangladesh, many feel, reflects a calculated effort by China to preserve its global trade flows in an era of heightened economic nationalism.
Fibre2Fashion News Desk (DR)
Wholesale revenue dropped 12.8 per cent on a currency-adjusted basis to €4.9 billion, while direct-to-consumer (DTC) sales increased 3.4 per cent, lifting the DTC share to 32.4 per cent from 28.9 per cent.
Regionally, sales fell 6.9 per cent in Europe, Middle East and Africa (EMEA), 7.4 per cent in Asia-Pacific and 10 per cent in the Americas, with North America driving much of the decline.
Puma has reported sales of €7.3 billion (~$8.61 billion) in FY25, with currency-adjusted revenue down 8.1 per cent amid strategic reset actions.
Wholesale declined while DTC share increased.
Margins contracted and EBIT turned negative, leading to a net loss.
Q4 saw sharper declines across regions and categories.
Puma expects further sales softness and negative EBIT in FY26.
By product segment, footwear sales decreased 7.1 per cent, apparel declined 9.7 per cent and accessories fell 8.5 per cent, although selective growth was observed in running, training and premium sport style lines, Puma said in a press release.
Profitability weakened significantly during the year. Gross margin contracted 260 basis points to 45.0 per cent, impacted by promotional activity, inventory reserves, unfavourable mix and currency effects. Adjusted EBIT turned negative at €165.6 million, while reported EBIT declined to -€357.2 million after €191.6 million in one-off costs related mainly to the cost efficiency programme and goodwill impairments.
Loss from continuing operations widened to -€643.6 million, translating to earnings per share of -€4.37 versus €1.88 in the prior year.
From a balance sheet perspective, inventories rose 2.3 per cent to €2.06 billion as inventory takebacks from wholesale partners supported distribution clean-up. Working capital increased 20.2 per cent, while trade receivables and payables declined sharply in line with reduced sales and purchasing activity. Puma ended the year with additional financing capacity, including €1,202.2 million in unutilised credit lines.
Fourth quarter (Q4) performance reflected the peak impact of the strategic reset. Currency-adjusted sales declined 20.7 per cent to €1,564.9 million, with reported revenue down 27.2 per cent due to currency headwinds. The decline was driven by deliberate reductions in wholesale exposure, inventory clearance actions and lower promotional intensity.
Wholesale sales fell 27.7 per cent in Q4, while DTC revenue decreased 8.0 per cent, although DTC share increased to 41.1 per cent from 35.5 per cent. Regionally, sales dropped 12.6 per cent in Asia-Pacific, 22.2 per cent in the Americas and 24.3 per cent in EMEA.
Across product divisions, footwear sales declined 25.4 per cent, apparel fell 13.7 per cent and accessories dropped 18.2 per cent, with selective resilience in training and performance running categories.
Profitability deteriorated sharply. Gross margin declined to 40.2 per cent from 47.7 per cent due to promotions, inventory provisions and currency effects. Adjusted EBIT fell to -€228.8 million, while reported EBIT reached -€307.7 million following one-off costs linked to restructuring and impairment charges. The quarter ended with a loss from continuing operations of -€335 million.
Arthur Hoeld, CEO of Puma, said: “2025 was a reset year for us. We want to establish Puma as a top 3 sports brand globally, return to above-industry growth and generate healthy profits in the medium term. It is crucial to make the Puma brand less commercial and ensure we once again excite our consumers with attractive products, compelling storytelling and distribution in the right channels. I am satisfied with the progress we have made so far. We cleaned up most of our distribution by reducing promotions in our own channels and cutting our exposure to those wholesale channels that damage our brand’s desirability. To better position our product icons and our performance offering and tell more engaging product stories, we created the right structures inside our company. We also addressed operational inefficiencies and further optimised our cost base.”
Looking ahead, Puma expects currency-adjusted sales in fiscal 2026 to decline in the low- to mid-single-digit percentage range, with EBIT projected between -€50 million and -€150 million. Capital expenditure of around €200 million is planned as the company continues investments in brand repositioning and digital capabilities, added the release.
Fibre2Fashion News Desk (SG)
Nominal GDP, or GDP at current prices, is estimated to grow at 8.6 per cent to reach ₹345.47 trillion in FY26 against ₹318.07 trillion in 2024-25.
India’s real GDP is estimated to grow at 7.6 per cent to ₹322.58 trillion (~$3.54 billion) in FY26 compared to the first revised GDP estimate of ₹299.89 trillion for FY25 (7.1 per cent growth).
It released the new series of annual and quarterly national accounts estimates with FY23 base.
Real GVA is projected to grow at 7.7 per cent to reach ₹294.40 trillion in FY26 against ₹273.36 trillion in FY25.
Real gross value added (GVA) is projected to grow at 7.7 per cent to reach ₹294.40 trillion in FY26 against ₹273.36 trillion in FY25 (a 7.3-per cent growth rate).
Nominal GVA is estimated to grow at 8.7 per cent to hit ₹313.61 trillion during FY26, against ₹288.54 lakh crore in 2024-25.
Robust economic performance in FY26 is primarily on account of robust real growth observed in the second quarter (8.4 per cent) and third quarter (7.8 per cent).
The manufacturing sector has been the major driver of resilient performance of the economy the consecutive three fiscals after rebasing, a release from the ministry said.
Both private final consumption expenditure and grossed fixed capital formation exhibited more than 7-per cent growth rate in FY26.
Fibre2Fashion News Desk (DS)
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