Trump’s Tariffs Threaten Myanmar’s Garment Industry

The Irrawaddy

YANGON – Myanmar’s already fragile garment industry is bracing for another major blow as the United States prepares to impose a steep 40 percent tariff on its exports, starting 1 August.

The move, announced by former U.S. President Donald Trump as part of a sweeping tariff package affecting 14 countries, will hit Myanmar and Laos the hardest. The levy targets the cut-make-pack (CMP) sector — including garments, bags, and footwear — which employs nearly 800,000 people and generates billions in annual exports.

“If the U.S. actually enforces these tariffs, we’ll feel the impact immediately,” said a Yangon-based factory owner. “Orders will fall sharply — especially for bags and shoes, which had full tariff exemptions before.”

The U.S. is Myanmar’s fourth-largest market for CMP goods, and American orders had been rising post-pandemic, according to the Myanmar Garment Manufacturers Association (MGMA). The new tariff, double the current average of 20 percent, threatens to derail that progress and further squeeze an industry already battling sanctions, energy shortages, and strict currency controls.

CMP exports generated $5.3 billion in 2022–2023, but fell to $4.46 billion in 2024. The MGMA warns that additional pressure from tariffs could push some manufacturers to cut jobs or shift focus away from the U.S. market entirely.

Trump’s letter to Myanmar’s junta, along with those to other targeted governments, outlines a tougher trade stance that also affects regional neighbours. Thailand and Cambodia face 36 percent tariffs, Bangladesh 35 percent, and Indonesia 32 percent.

The junta has criticised the decision, calling it inappropriate for a developing country. Junta chief Min Aung Hlaing told Russia’s RT in May that Myanmar’s annual trade with the U.S. rarely exceeds $900 million, arguing the move would disproportionately harm small exporters.

While bilateral trade remains modest by global standards, the impact on individual businesses is expected to be severe. “If our goods become less competitive, we risk losing what little share we have in the U.S. market,” a senior trade official warned.

As Myanmar’s relations with the West continue to deteriorate post-coup, many in the industry fear this latest setback could deepen the economic crisis — with factory workers once again on the front line.

-2025-07-10