The country’s readymade garment manufacturers expressed concern over the US’s fresh 37 per cent tariff imposition on all Bangladeshi exporting products.
In 2024, Bangladesh exported apparel items worth $7.34 billion to the US with a marginal growth of 0.75 per cent.
On Wednesday, US president Donald Trump announced hefty duties on multiple countries as part of sweeping global tariffs, branding the move ‘Liberation Day’.
In line with the Trump’s policy of imposing at least half of the tariff on US goods, Bangladesh has been slapped with 37 per cent tariff as the Trump team calculated that Bangladesh imposes about 74 per cent tariffs on imports from the US.
Currently, most Bangladeshi goods in the US face a 15 per cent tariff.
Among major competitors, China faces 34 per cent, Vietnam 46 per cent, Cambodia 49 per cent, and Sri Lanka 44 per cent, while India and Pakistan face 26 per cent and 29 per cent tariffs, respectively.
Talking to New Age, Faruque Hassan, former president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), called for diplomatic, political, and commercial measures to resolve the issue.
‘The US cites tariffs, currency manipulation, and non-tariff barriers as reasons, but Bangladesh does not have such issues,’ he said.
He urged the government to resolve the dispute through negotiations rather than retaliatory duties, emphasising a ‘win-win’ approach.
He also said that Bangladesh’s export sector would not be disproportionately affected since competing nations face high tariffs.
Fazlul Hoque, managing director of Plummy Fashion, told New Age that the immediate impact of the US reciprocal tariff on Bangladesh will be US buyers’ pressure on manufacturers for cutting price.
‘However, I do not believe the country’s apparel exports will be heavily affected, as we largely export basic garments,’ former BKMEA president Fazlul Hoque said.
He said that Bangladeshi manufacturers would inevitably have to lower product prices in response to growing buyer pressure, and the government should convene a meeting with stakeholders without delay to devise a strategy to manage the challenges posed by the US tariff.
He said that while exports would hopefully not decrease significantly, policy support would be needed to face the challenges of the US tariff.
Fazlul explained that since Bangladesh exports essential items, US retailers would unlikely increase their prices.
He said that to keep retail prices unchanged, retailers would absorb a portion of the increased costs caused by the additional tariff, while the remaining portion would be passed on to manufacturers.
‘The US has imposed tariffs on nearly all its trading partners worldwide, and while it is good news for Bangladesh that Vietnam and Cambodia face higher tariffs, it is concerning that India, Pakistan, and Indonesia have lower tariffs,’ Fazlul said.
He said that the Indian government offered attractive packages to attract investment in the readymade garment sector, and the country increased its capacity in the past couple of years.
‘It is true the inquiry of the US buyers in India increased significantly in past few years but the supply base of Indian apparel sector is yet to be strong,’ Fazlul mentioned.
BGMEA administrator Anwar Hossain said that they were not ready for this as it came suddenly.
‘However, regional trade rivals also were in a worse situation. Compared with our competitors like China, Vietnam and Sri Lanka, we are still ahead as their tariff is higher than us,’ he added.
Professor Mustafizur Rahman, distinguished fellow of the Centre for Policy Dialogue, said that Bangladesh is the 5th largest importer of US cotton, which is used to make RMG items and export them to the US.
As Trump said that tariffs on imported cotton from the US will be relaxed, he suggested addressing the issue through the Trade and Investment Cooperation Forum Agreement (TICFA) and focusing on enhancing competitiveness, reducing business costs, and diversifying markets.
Zahid Hussain, former lead economist at the World Bank’s Dhaka office, echoed concerns, telling New Age that the higher tariffs would hurt Bangladesh’s exports due to a decline in US consumer demand.
He also said that overall price increase due to tariffs would reduce consumers’ purchasing capacity.
He stressed the need for Bangladesh to engage in negotiations to clarify the 74 per cent tariff calculation and highlight any recent reforms that could justify exemptions.
‘Bangladesh’s major competitors Vietnam, Cambodia, India, Pakistan, and Sri Lanka will not necessarily gain any additional advantage from this situation,’ he added.
South Asian Network on Economic Modelling executive director Selim Raihan also has expressed deep concern.
‘This imposition will not only harm Bangladesh but also many other developing countries,’ he warned.
He urged Bangladeshi policymakers to engage with their US counterparts to address concerns over the tariff, mainly due to the ambiguity surrounding its calculation.
Meanwhile, in a press conference, chief adviser’s press secretary Shafiqul Alam said their ongoing work with the US government is expected to help address the tariff issue.
‘Bangladesh is reviewing its tariffs on products imported from the United States,’ said the press secretary.
He said the National Board of Revenue is identifying options to rationalise tariffs, which is necessary to address the matter.
