FILE PHOTO: REUTERS

President Trump’s recent imposition of steep tariffs on countries around the world has shocked the international community. It has sent the share market tumbling, wiping off some $6 trillion from Wall Street in a fateful two days since the announcement went public earlier this week. As countries and their leaders are formulating their responses—some favouring a more belligerent approach, like China and perhaps the European Union—and others most likely making a frantic dash through formal and informal channels to appease the US president, Bangladesh faces a precarious scenario. While the way the tariffs have been calculated has puzzled economists and trade analysts alike, the effect on the world economy doesn’t look very promising. But I’ll let people who are trained in trade policy and economics address that. What is critical to the declaration of an additional 37 percent tariff on Bangladeshi imports is this: what does it mean for women’s labour force participation in the country, and more broadly, women’s economic empowerment?

Although the new tariff, has been applied immediately to all Bangladeshi goods entering the US, the sector that will be disproportionately hit is Bangladesh’s RMG industry. The RMG sector contributes to 80 percent of the total national exports in Bangladesh and 10 percent of the country’s GDP. It also employs some four million workers, more than 60 percent of whom are women. Even after all the talk in the last few decades about diversifying Bangladesh’s export portfolio, the country is still very much dependent on the RMG sector for bringing foreign currency into the nation, thereby being a key driver of the economy. Among the countries in South Asia, Bangladesh has somehow been slapped with the second-highest tariff, coming only after Sri Lanka, which has seen a 44 percent tariff imposed. India and Pakistan are at 27 percent and 29 percent, respectively. Economists around the world are still scratching their heads about how the “reciprocal tariff” was calculated. But that is also something probably not worth debating anymore—it is the post-truth world we live in, and as a nation whose single largest export market is the US, there is only so much flexing our muscles can do.

One thing that is often ignored in policy circles is the impact of the RMG sector beyond the economic sphere and its effect on the overall journey of women’s empowerment in Bangladesh. The growth of the sector has coincided with phenomenal social transformation: fertility declined from 6.9 births per woman in the early 1970s to around 2 by 2021, and the average age of marriage for girls rose from 14.6 years to 17 years within a similar time period. Some 15 percent of all Bangladeshi women aged 16-30 now work in the garments sector. This is a very high number in the national context, where less than half of Bangladeshi women participate in the labour force. All this points to the fact that the prosperity of the garments sector is closely linked with female economic empowerment.

Researchers have found solid evidence that the availability of nearby manufacturing jobs has positive impacts on women’s life prospects. One study examining the impact of RMG factories in Bangladesh found that girls living near garment factories married and had children later than those in villages without nearby factories. The profound impact of this cannot be overstated. Delaying marriage and childbearing until women are ready and able has long-term consequences for health outcomes and directly contributes to their ability to be financially independent. Young girls in villages with nearby factories are more likely to stay in school, since better-paying jobs are awarded to workers with more cognitive skills. Meanwhile, adolescent girls gain the option of wage work, as older girls are more likely to be employed in the factories. Together, these effects lead to families investing in girls’ education and deferring marriage and childbearing.

On the other hand, staying out of school and losing potential employment opportunities has a deleterious effect on girls’ empowerment. During the Covid lockdown, there was a spike in child marriage, which was the outcome of parents marrying off young girls as a coping strategy to deal with economic strain at the household level.

Trade analysts and industry actors are perhaps better positioned to forecast what this tariff means in real terms for the garments sector. Both Vietnam and Cambodia are facing their own tariff-related challenges, with 46 percent and 49 percent tariffs imposed on their imports, respectively. Common-sense logic indicates that the competitive advantage Bangladesh enjoys—low labour costs—will be further stretched, with RMG companies already operating on razor-thin margins. The rising costs in the US market of garment products made in Bangladesh will compel buyers—i.e., the brands—to move to other, more favourable countries, such as Egypt, Kenya, or Honduras—all three of which have lower tariffs imposed on them by the US.

Regardless of the government response—which I believe will be driven by negotiation and diplomacy to gain concessions—the impact on women’s labour force participation and overall financial empowerment is very much on the line. The recent cuts to foreign aid by the US have been decried by many, but this will be a larger blow to women’s economic empowerment, as Bangladesh has yet to develop a sector that can hire and retain women workers at such scale. The strain on the RMG sector may eventually lead to job cuts and women moving down to lower-productivity jobs and more traditional gender roles. Families will also not see the value in sending girls to school without the economic pay-off, and this might lead to a further rise in child marriage.

Trade policies such as these have a strong impact on social outcomes, as decades of progress could be eroded by these decisions. Policymakers and other development partners should take note of this phenomenon and begin thinking of policy tools like cash transfers and support for displaced women workers. Let’s not let the hard-won gains of the last few decades in women’s economic empowerment go to waste. The losses could very well be irreversible.