As the United State Supreme Court annulled a large portion of the additional tariffs imposed by President Donald Trump, the effective tariff burden on Bangladeshi products has decreased.
Previously, an additional tariff of 19% was in effect on Bangladeshi products. After the court’s ruling annulled it, the president announced the imposition of a new 10% tariff. As a result, the overall effective tariff rate has decreased by 9% compared to before.
The business and export community view this as significant relief for Bangladesh.
Changes in tariff structure
Last year, tariffs imposed under emergency economic powers caused products from Bangladesh and many other countries to face additional duties in the US market.
This increased importers’ costs and affected supply chains, pricing, and long-term procurement planning.
In a 6–3 verdict, the Supreme Court stated that the president does not have the authority to impose tariffs on such a broad scale under that law. As a result, the additional 19% tariff was annulled.
However, a temporary global tariff of 10% was later imposed under Section 122 of the Trade Act of 1974, which has been announced to remain effective for up to five months.
Although this has not fully restored relief, both importers and exporters have gained some comfort as the effective tariff rate has declined compared to before.
The United States is one of Bangladesh’s main export markets.
A large portion of purchase orders in the readymade garment (RMG) sector comes from this market.
While the additional tariff was in effect, many buyers demanded price discounts, and some suspended orders. This created pressure on production planning and profits.
In the current situation, the potential positive aspects are that importers’ costs will decrease comparatively.
Suspended purchase orders may become active again. Pressure for price discounts may ease somewhat. The price gap with competitor countries may partially narrow.
However, analysts say this benefit is not exclusive to Bangladesh; other exporting countries such as China, Vietnam, and India will also come under the same decision. As a result, competition in the United States market may intensify further.
Mahmud Hasan Khan Babu, president of the Bangladesh Garment Manufacturers and Exporters Association, described the decision as positive. According to him, when tariffs are higher, product prices increase at the import stage and ultimately affect retail markets. When prices rise, demand declines, sales decrease, and exporting countries suffer.
He said the reduction in tariffs from 19% to 10% is undoubtedly relieving. However, the main concern is policy instability. Frequent tariff changes create uncertainty for importers in long-term planning. This carries the risk of shifting toward alternative sources.
Former BGMEA director and additional managing director of Denim Expert Ltd Mohiuddin Rubel said the United States court’s ruling will not create any exceptional benefit specifically for Bangladesh; rather, it is a positive step toward restoring normalcy in global trade.
“Bangladesh was already performing well in the United States market. That continuity now has the opportunity to continue. Trump’s tariff imposition created a kind of instability in global business and trade. Its impact was also felt in the European market—overall sales declined. Now, if the situation normalizes, demand and sales will gradually increase.”
He added that if no new tariff structure or policy changes emerge in the future, global trade flows will stabilize. This could increase Bangladesh’s exports and business overall.
Uncertainty in global trade
The court’s ruling has also created the possibility of refunds for the large amount of tariffs collected over the past year.
However, the administration has said the matter may undergo a lengthy legal process. At the same time, there are indications that tariff rates may be increased again in the future based on new investigations.
As a result, it cannot yet be confirmed whether the current relief is temporary or long-term.
According to analysts, although tariff reductions are positive, this is not the final word. Bangladesh must now become more competitive. In particular: production efficiency must be increased, product quality improved, timely delivery ensured, energy and transport costs controlled, market diversification and technology-based production strengthened, design improved, and environmentally friendly factory management emphasized.
At the same time, importance must be given to increasing exports of leather goods, pharmaceuticals, and agricultural products alongside ready-made garments.
