A factory owner told me that 70% of his orders go to the United States. He is shifting away from that concentration effective today. That’s his first step.
He is not alone. Most owners I sit with now are saying the same thing in different words. They are quietly pulling away from American buyers, often choosing Europe with all its regulatory complexity as the alternative. The largest consumer market in the world, and people who have spent decades building businesses around it are deciding to take less of it.
The apparent reason is that 50% tariffs broke the math. But the 50% were deuced and sitting through these conversations, what I hear underneath the math is something more specific. The math will sort itself out one way or another. What does not sort itself out is what the owners learned about how decisions can get made in Washington.
Start with the math, because it is real.
Garment manufacturing for low-complexity products turns profits at scale: a few cents on the dollar across millions of units. Add a 50% tariff on top of existing US duties on Indian apparel, and the model inverts.
The US brand’s calculation, pre-tariff, when most countries faced roughly 10-20% MFN duty on apparel (World Trade Organization, 2024):
- India FOB freight on board): $4.00, lands in US around $4.80
- Bangladesh FOB: $3.90, lands around $4.70
The brand sourced from both, fairly indifferent.
Post-tariff, with India at 50% and Bangladesh closer to 20% (The White House, 2026):
- India FOB: $4.00, plus $2.00 duty, lands around $6.30
- Bangladesh FOB: $3.90, plus $0.78 duty, lands around $4.80
Same product, 30% more expensive at the US border. Most brands will not pay it. They shift the order to one of their qualified suppliers in Bangladesh, Vietnam, or Indonesia (Office of Textiles and Apparel [OTEXA], 2025). Apparel orders are placed season by season, not year by year. There is no long-term commitment to break.
The Indian factory’s only counter-move is to absorb the gap. To match Bangladesh’s landed cost, FOB has to drop by 20%. On 8-12% EBITDA, that takes you from +10% margin to -10%. You are now shipping at a loss on every piece. You can do that for one season to keep the relationship warm, but not for two.
So the factory faces a binary choice: hold price and lose the orders, or drop price and bleed cash. Both end the same way for the workforce.
What I hear in the conversations, though, is not really about this tariff. It is about what this tariff revealed.
Whether Trump’s policy is rational or has a grand plan behind it does not matter to the owners I sit with. What matters is how it looked from where they sit: tariffs imposed, changed and lifted casually, on one person’s decision. Trump might never impose a tariff on India again. There might be a calmer regime next. None of that changes the calculus. We always knew that the USA has a lot of power, what factory owners now realised through and through is that there may very well be a person in the role of president who wields that power in a disruptive way.
While Washington adds uncertainty, Brussels is moving the other way. Recent progress on EU trade negotiations with India and other manufacturing nations means selling into Europe is becoming meaningfully cheaper than it was (European Commission, 2026). If your two options are less total but more assured turnover with the EU, or higher turnover in the US with the risk of going through the same pains you just experienced, the decision becomes clearer.
What I hear is also more than the math. It is frustration, and in some cases a sense of personal insult.
What used to be a friend, an opener of growth and an enabler for wealth creation, has added a new side: the disruptor whose intent has to be managed against. Pair this with comments aimed at India that hit personally. The most consistent one in my conversations is Trump’s claim to have brokered peace between India and Pakistan, a role India has publicly rejected (Ministry of External Affairs, 2025). I have heard it in almost every conversation about Trump and America I have had here. It is not a footnote. It is the comment owners come back to when the tariffs come up.
I am not sure how much of business is supposed to be emotional. In practice, the people making decisions are not separating the two as cleanly as economic essays and profit loss statements do.
The owner moving from 70% to below 50% knows what most owners I sit with also acknowledge: Trump is doing what presidents do, looking out for his country. India has historically been a higher-tariff country than the US (USAFacts, 2026; World Trade Organization, 2024). Most countries, including the EU, have tariffed America more aggressively for decades. The presence of tariffs is not what is driving this. It is the way they were imposed, and the tone that came with them.
He is not betting against America. He is betting against unpredictability. And he is unlikely to bet on it again any time soon.
Reference list
European Commission. (2026, January 27). EU and India conclude landmark Free Trade Agreement [Press release]. Link
Ministry of External Affairs, Government of India. (2025, May 13). Transcript of weekly media briefing by the Official Spokesperson (May 13, 2025). Link
Office of Textiles and Apparel. (2025). OTEXA trade data: U.S. imports of textiles and apparel. International Trade Administration, U.S. Department of Commerce. Link
Office of the United States Trade Representative. (2025, August 27). Notice of implementation of additional duties on products of India pursuant to the President’s Executive Order 14329. Federal Register, 90, 41xxx. Link
The White House. (2025, August 6). Executive Order 14329: Addressing threats to the United States by the Government of the Russian Federation. The American Presidency Project. Link
The White House. (2026, February 9). Joint statement on framework for United States–Bangladesh agreement on reciprocal trade. Link
USAFacts. (2026). What is the average US tariff rate for India? Link
World Trade Organization. (2024). World tariff profiles 2024: India. Link
