Some suppliers of retail giant Walmart (WMT) have paused or delayed orders from clothing factories in Bangladesh because of President Trump’s threat to place a 35% tariff on imports from the country. According to Reuters, which cited three factory owners and a supplier’s email, the uncertainty is already affecting business. Bangladesh, which depends on the apparel industry for 80% of its export earnings and 10% of its GDP, could see a sharp drop in U.S. orders if the tariff takes effect on August 1. Factory owners say they simply can’t absorb such a steep tax and expect demand to fall as a result.
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One major example involves an order of nearly one million swim shorts for Walmart, which was put on hold on July 11, according to Iqbal Hossain, head of Patriot Eco Apparel Ltd. In an email to Hossain and others, a manager from Classic Fashion—an agent that places orders for big retailers—wrote that all spring season orders from Bangladesh were being paused due to the potential tariff. The manager also clarified that this decision came from Classic Fashion’s leadership, not Walmart directly.
Meanwhile, Bangladesh is holding discussions in Washington to try to reduce the proposed tariff. Factory owner Mohiuddin Rubel, who makes jeans for brands like H&M (DE:HMSB), said that if the 35% tariff goes into effect, his clients may pressure him to absorb some of the cost, which he says is financially impossible, especially after already handling the 10% blanket tariff added in April. Therefore, Hossain stated that he might shift his focus to Europe to make up for lost U.S. business, even if it means lowering prices.
Is WMT Stock a Good Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on WMT stock based on 29 Buys assigned in the past three months, as indicated by the graphic below. Furthermore, the average WMT price target of $111.25 per share implies 17.8% upside potential.
