Navigating Trade Wars: 6 Smart Short-Term Strategies for Businesses — A Bangladesh Perspective

Trade wars and tariff fluctuations aren’t just global headlines; they have very real impacts on emerging economies like Bangladesh. As one of the world’s fastest-growing manufacturing hubs, especially in textiles and garments, Bangladesh’s economy depends heavily on international trade. Sudden changes in tariffs or trade policies from key partners like the US, EU, or China can disrupt supply chains, raise costs, and threaten export competitiveness.

So how can Bangladeshi businesses and policymakers respond effectively in the short term? Drawing on insights from global supply chain experts, here are six actionable strategies that are highly relevant for Bangladesh’s unique trade landscape.

1. Set Up Dedicated Trade War Response Teams

For Bangladeshi exporters and manufacturers, especially in ready-made garments (RMG), creating internal “war rooms” or rapid response teams is crucial. These teams can monitor trade developments with major partners like the US and EU and quickly adjust sourcing, pricing, or production plans. This agility is key in avoiding costly delays and tariff surprises (Harvard Business Review, 2025).

Case Study: A leading Dhaka-based garment manufacturer formed a cross-departmental “war room” in 2024 during escalating US-China trade tensions. This team helped them swiftly shift production schedules and suppliers, reducing lead time by 15% and mitigating potential tariff impacts.

2. Diversify Sourcing and Manufacturing Locations

Bangladesh’s supply chains often rely on imports of raw materials and accessories from China and India. Given fluctuating tariffs or border restrictions, businesses should explore alternative suppliers, possibly within South Asia or Southeast Asia, to reduce overdependence on any single country. Similarly, considering assembly or finishing in other countries could protect against tariff shocks (Harvard Business Review, 2025).

Statistics: According to Bangladesh’s Export Promotion Bureau (2024), over 60% of RMG raw materials are imported from China. A shift toward sourcing from Vietnam or local suppliers could reduce tariff exposure.

3. Build Strategic Inventory Buffers

Since lead times in Bangladesh’s export sectors can be long, stockpiling critical materials ahead of anticipated tariff hikes can help smooth production cycles. For example, garment factories might increase inventory of key fabrics or trims to avoid disruption during trade policy shifts. However, this must be balanced carefully given storage costs and capital constraints common in Bangladesh’s SME sector (Harvard Business Review, 2025).

Case Study: Several medium-sized textile suppliers in Chattogram increased fabric inventory by 20% ahead of the EU’s tariff changes in early 2025, allowing uninterrupted shipments and stable pricing.

4. Implement Flexible Pricing Models

Bangladeshi exporters face tight competition on price, especially in markets like the US and Europe. Businesses that adopt dynamic pricing—adjusting prices in response to tariff-related cost changes—can maintain competitiveness without sacrificing margins. This flexibility could mean renegotiating contracts with foreign buyers or selectively adjusting prices in certain product lines (Harvard Business Review, 2025).

5. Strengthen Supplier and Buyer Relationships

In Bangladesh’s export ecosystem, strong collaboration with both local suppliers and international buyers is vital. Frequent communication and shared problem-solving can lead to more favorable payment terms, risk sharing, and joint strategies to navigate tariffs. This partnership approach also helps mitigate risks associated with trade wars (Harvard Business Review, 2025).

Statistics: A 2023 survey by the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) found that 72% of exporters increased supplier communications during trade disruptions, which correlated with a 10% increase in on-time deliveries.

6. Engage and Support Employees During Uncertainty

Trade disruptions can affect workers across Bangladesh’s manufacturing sectors, from factories to logistics. Transparent communication about trade challenges and involving employees in adaptation plans helps maintain morale and productivity. Supporting worker training and retention during these periods also builds long-term resilience (Harvard Business Review, 2025).

What This Means for Bangladesh’s Future

Bangladesh has demonstrated remarkable growth and resilience in global trade, especially through its garment exports which contribute about 84% of the country’s total exports (World Bank, 2024). However, trade wars highlight the fragility of relying heavily on a few markets or sourcing channels. By adopting these short-term strategies, Bangladeshi businesses can not only survive tariff volatility but also position themselves for sustained growth amid global uncertainty.

Policymakers can support this by facilitating trade information sharing, encouraging supply chain diversification, and investing in workforce development to boost competitiveness.

References

Bangladesh Export Promotion Bureau (2024) Annual Trade Report 2024. Dhaka: EPB.

Bangladesh Garment Manufacturers and Exporters Association (BGMEA) (2023) Trade Disruption Survey. Dhaka: BGMEA.

Harvard Business Review (2025) ‘6 Short-Term Strategies for Doing Business in a Trade War’. Available at: https://hbr.org/2025/06/6-short-term-strategies-for-doing-business-in-a-trade-war (Accessed: 12 June 2025).

World Bank (2024) Bangladesh Country Economic Update. Washington, DC: World Bank.