For Vicky Bowman, former director of the now-defunct Myanmar Centre for Responsible Business, there is only one way to characterize the 44 percent “reciprocal” tariff that the Trump administration slapped on Myanmar last week.
“This is a kick in the teeth for the Myanmar people from Donald Trump,” the former U.K. ambassador to Myanmar said.
Until her organization shuttered last year due to the Myanmar’s “increasingly difficult” operating environment, Bowman had been working to encourage responsible business engagement in the beleaguered Southeast Asian nation, which, in recent years, has lived through the violent military ouster of its semi-democratic government and barely survived several natural disasters, including a 7.7-magnitude earthquake last month that killed 3,600 people and injured 5,000 more, according to official estimates.
While the White House announced on Wednesday a 90-day pause for all affected countries except for China—albeit with a 10 percent “universal” levy until then—uncertainty still weighs heavily on what the World Bank describes as Myanmar’s “weak and constrained” economic activity, which contracted during the Covid-19 pandemic in 2020 and shrank further still in the aftermath of the coup in 2021. Today, nearly half of Myanmar’s population of 54 million lives below the poverty line on less than 76 cents a day, according to a United Nations report published last year. If the United States chooses, ultimately, to punish the country for a trade deficit of $579.3 million in 2024, a 15.5 percent decrease from the $105.8 million in 2023, the impacts could be phenomenal.
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“Although overall exports in 2024 were about half of what they were at their pre-Covid peak in 2019, exports of luggage, handbags, backpacks and headgear were still significant,” Bowman said, adding that some U.S. companies that were sourcing items such as lingerie and baseball caps from China had been looking at Myanmar as part of their “plus one” strategy to diversify from the heavy tariff target. “Whether they continue to do so remains to be seen,” she said.
But sourcing from Myanmar has been a fraught prospect since the junta’s takeover. For years, civil society organizations and trade unions have been calling on Western brands and retailers to exit responsibly from the country because of deteriorating labor conditions that end up enriching the military dictatorship’s coffers. This has resulted in a steady exodus of nameplates such as H&M Group, Zara owner Inditex, Uniqlo parent Fast Retailing, Lidl, Marks & Spencer, Primark and Tesco, albeit with varying and sometimes undefined timelines.
In November, IndustriALL Global Union, together with its affiliates the Confederation of Trade Unions, Myanmar and Industrial Workers Federation of Myanmar, filed complaints with the Organization for Economic Cooperation and Development, or OECD, against remaining brands Next, New Yorker and LPP, accusing them of profiting from an “environment of fear, forced labor and exploitation” in a country with no freedom of association and scant rule of law. Other companies, such as Adidas, Bestseller and Takko, have also stuck it out, saying that exiting would destroy livelihoods already under duress and that they would ramp up their due diligence measures.
It’s difficult to say whether countries still importing products from Myanmar into the United States will continue to do so amid the whipsaw of policy pronouncements and their reversals. But a foregone conclusion, the Myanmar Garment Manufacturers Association said in a statement Monday evening, is that any new levies will “only exacerbate the many challenges confronting Myanmar businesses and communities” in the wake of an earthquake that has caused major damage to six regions and states, including industrial zones in Pyigyitagon and Kyaukse, and left more than 17.2 million people in urgent need of food, drinking water, shelter and medical care. It’s in light of the country’s multiple crises that the trade group has asked the United States to consider “a more lenient rate.”
“The tariffs could lead to stinging job losses and weaken business partnerships that tie the two countries’ private sectors, and consumers, businesses or employees in either country will ultimately not benefit,” it said. “The impacts also risk undermining the sector’s long-standing efforts to address and safeguard labor issues. The garment sector has struggled with various challenges through the years and previous shocks and measures have clearly demonstrated the unintended consequences. These included forcing workers into all manner of exploitation, including demeaning work and trafficking.”
But that’s not all Myanmar is facing: The Confederation of Trade Unions, Myanmar wrote in a note last week that while the National Unity Government and pro-democracy armed groups have declared a ceasefire to help those affected by the earthquake, the junta has continued to carry out aerial bombardments. Kyaw, the pseudonym that the co-founder of Myanmar Labour News has adopted for safety reasons, said that garment workers in Bago and Yangon are being forced into overtime to make up for production lost due to power cuts caused by the tremblor, though wrecked roads and rail systems could cause further delays in shipments. The same factory employees are also among the deaths and casualties, he said, though a number has yet to be released.
“The military is weaponizing the suffering of the people,” said a local community leader, who spoke on the condition of anonymity because of fear of retaliation. “Aid is being diverted to loyalists while devastated communities in Sagaing and Mandalay are left to suffer. The regime is exploiting the earthquake to tighten its grip on our country.”
‘Exceptional circumstances’
The disaster has thrown into relief the consequences of the Trump administration’s hasty dismantling of foreign aid. Notably missing in recovery efforts are the 200 rescue workers, along with sniffer dogs and specialized equipment, that the United States would have deployed in similar disasters. Under ordinary circumstances, the federal government would have also shelled out $10 million to $20 million in the immediate phase of response to something on the scale of the Myanmar earthquake, with more earmarked for rebuilding and other long-term efforts. While the United States has since pledged $9 million to the country, the U.S. disaster assistance response teams known as DARTs have been missing in action, hampered by the decimation of the U.S. Agency for International Development, or USAID. Instead, U.S. aid workers who had been sleeping on the streets in earthquake zones found themselves served with termination notices even as they were organizing help, former USAID officials told Reuters last week.
When questioned about the United States’ muted response in Brussels on Friday, Secretary of State Marco Rubio said that other large countries, including China and India, need to contribute a larger share of global aid. “We are the richest country in the world, but our resources are not unlimited,” he said.
China, for its part, has committed $14 million in assistance for Myanmar, including 1,200 tents, 8,000 blankets, 40,000 first aid kits and 126 Chinese relief workers whose distinctive blue-and-orange uniforms can be spotted in videos of the devastation circulating on social media. On Sunday, India’s navy delivered 442 metric tons of food aid, including rice, noodles, cooking oil and biscuits as part of the relief mission it has dubbed “Operation Brahma” in a nod to the creator god of Hinduism. Last week, six Democratic senators sent a letter to Rubio criticizing the United States’ failure to pass the “first test” of its ability to provide humanitarian assistance and amid the kneecapping of USAID for “sending a signal to countries around the world that our adversaries are more reliable and trustworthy.”
With the earthquake compounding an “already incredibly complicated” conflict, brands and retailers that have yet to divest from Myanmar have a responsibility to engage with what’s happening, said Natalie Swan, labor rights program manager at the Business & Human Rights Resource Center, a labor watchdog group.
“For those brands who have committed to continue to source from Myanmar, they have stated that worker welfare and livelihoods are paramount,” she said. “This is now a moment for them to demonstrate commitment to Myanmar’s workers, both in terms of any emergency support needed and making sure that wages get paid.”
What makes the situation more complicated is that “this is an earthquake in a conflict zone, in a country where human rights are not being respected to a higher degree that, say, in other sourcing countries,” Swan added. “The heightened due diligence that is required for brands In Myanmar only becomes more important at times of crisis like this.”
The Ethical Trading Initiative, a multi-stakeholder organization whose brand members include Inditex and Next, wrote in a note late last month urging companies operating in and sourcing from Myanmar to engage with their colleagues and suppliers to understand the impacts of the earthquake and offer them support where possible, including adjusting expectations and purchasing practices to “adapt to these exceptional circumstances” to provide the stability that suppliers and their employees need at this time. It was also ETI that published an assessment in 2022 concluding that it “wasn’t possible” for responsible businesses to apply normal human rights due diligence in Myanmar.
There are some signs of rallying by the industry. Bestseller is donating $250,000 from its foundation to the Myanmar arm of Save the Children, Takko has pledged $100,000 to earthquake victims in Mandalay and Adidas has made an unspecified donation to the United Nations High Commissioner for Refugees despite the fact that none of the factories they use have reported damage of casualties. The European Chamber of Commerce in Myanmar, which advocates for European businesses such as Bestseller and H&M in the country, has transferred two tranches of donations totaling 240 million kyats, or roughly $114,000, to implementing partners such as the Danish Red Cross and Medical Action Myanmar while calling for more pledges from the European business community. Inditex said it has given 400,000 euros ($453,000) to Doctors Without Borders -Médecins Sans Frontières to “support care for the victims of the earthquake in Myanmar.”
To avoid making inadvertent payments to the junta, IndustriALL Global Union has asked that all humanitarian assistance be channelled through the National Unity Government, ethnic organizations, the Confederation of Trade Unions Myanmar and trusted local civil society and community groups “that have clearly demonstrated commitment and capacity to deliver impartial and life-saving relief.” The Asia Floor Wage Alliance has said the same.
“Our contacts on the ground have alerted us to an alarming situation—aid is not reaching the victims who need it most,” said Dian Septi, the nonprofit’s Southeast Asia coordinator. “We must coordinate support that goes directly to those risking their lives to help. When aid falls into the hands of the military, it is plundered and diverted to rebuild their strongholds instead of saving lives. That is why we are working with local workers, activists and community leaders to make sure aid goes directly to victims and people coordinating relief efforts.”
But other brands whose names appear regularly on BHRRC’s worker allegations tracker, including H&M—which, like Inditex, has not yet confirmed an exit date despite saying it would be leaving Myanmar—did not respond to questions about the support they have or would be extending, drawing potential parallels with the aftermath of Turkey’s twin earthquakes in 2023, when workers and suppliers felt largely abandoned by their buyers.
“I do not hear anything about the brands’ actions, such as checking with workers or making donations to workers or affected areas,” said Khaing Zar Aung, the exiled president of the Industrial Workers Federation of Myanmar. She had especially harsh words for companies that are continuing to do business in the nation. “Brands that declare they are doing human rights due diligence in Myanmar, they know themselves that they are lying,” she said.
Bego Demir, coordinator at Clean Clothes Campaign Turkey, a workers’ rights group, remembers trying to convince brands to step in when factories started laying off workers after a government directive prohibiting dismissals during earthquake recovery expired after three months.
“Their excuse was, ‘We didn’t dismiss them right after the earthquake. We dismissed them three months later,‘” he said of manufacturers like Baykan Denim, which axed the workers who had to move away after the disaster without compensation.
It took the intervention of Inditex, one of Baykan Denim’s buyers, for the factory to pay 28 of the 270 affected workers, who had organized themselves under the union Birtek-Sen, the $32,000 they said they were owed. He was less successful with others such as Bestseller, S.Oliver and Marks and Spencer, which collaborated on an investigation that found that evidence of specific violations were not substantiated and that workers who requested severance for reasons recognized under Turkish labor law had received their dues. Baykan Denim did not respond to a request for comment.
“We were trying to convince brands, like, it’s your supply chain that you are responsible for,” Demir said. “For us, brands are the principal employer. They are the party who has the power in the supply chain. Just be a bit of a human being, you know?”
A labor activist in Yangon, who asked not to be named, concurred. “So far, there is no action from brands supporting earthquake victims in Myanmar,” this person said. “It is disappointing to see that there is no quick response from brands to provide emergency relief. Emergency relief is a priority for workers and their families who have lost everything, and brands sourcing from Myanmar have not done anything at all. I hope they will participate and contribute during the rebuild and recovery phase.”