Bangladesh鈥檚 readymade garment exporters have sought detailed clarification and an implementation mechanism regarding a recent United States executive order that allows a 20 per cent reciprocal tariff on Bangladeshi goods to be reduced if at least 20 per cent US-origin content or raw materials are used.
The issue was discussed on Monday during a meeting between a visiting US Trade Representative delegation and the Bangladesh Garment Manufacturers and Exporters Association at the US Embassy in Dhaka.
BGMEA president Mahmud Hasan Khan Babu and Brendan Lynch, USTR assistant representative for South and Central Asia, led the talks.
A three-member USTR team arrived in Dhaka on Sunday for a two-day visit to follow up on earlier discussions in Washington and to review a draft trade agreement with Bangladesh.
After the meeting, Mahmud Hasan Khan told 抖阴精品 that exporters sought clarity on 鈥榯he valuation and traceability mechanisms to determine US input content.鈥�
In response, the US delegation said that US Customs was finalising the process within the stipulated timeframe.
According to clause F of section 3 of the US Executive Order 14257, issued on April 2, if an export to the US contains 20 per cent or more US-origin content, the reciprocal tariff would not apply to that portion. For instance, if an apparel item worth $100 includes 26 per cent US materials, the duty would only be imposed on the remaining $74.
The BGMEA president said that exporters also urged the US to adopt a 鈥榮tacking method鈥� to adjust duties in line with other imports, which would reduce tariff burdens and enhance Bangladesh鈥檚 competitiveness.
鈥楬owever, only the EU currently enjoys such a facility, and while the US advised us to apply, they gave no major assurance,鈥� he added.
Under stacking tariffs, multiple duties鈥攕uch as the MFN rate and reciprocal tariffs鈥攁re applied sequentially on duty-inclusive values, which raises the effective rate beyond a flat calculation.
Exporters want a harmonised formula where all duties are calculated on the base value to keep rates closer to a weighted average.
Despite securing a 20 per cent reciprocal tariff facility, Bangladesh鈥檚 exports to the US still face an effective duty rate of about 36.5 per cent, including the average 16.5 per cent MFN tariff.
鈥楾his remains a major challenge for our apparel exports,鈥� Mahmud Hasan said, urging the USTR to consider deeper tariff cuts.
On labour law reforms, Lynch stressed that amendments to Bangladesh鈥檚 Labour Act should align with international standards and ILO guidelines.
The BGMEA president assured that consultations with 81 trade unions were already underway to ensure practical and inclusive reforms that safeguard both jobs and industrial growth.
He added that the US delegation expressed satisfaction with the discussions and optimism about lowering tariffs as bilateral trade expands.
Mahmud Hasan also said that Bangladesh would import more US cotton to help reduce the trade deficit.
Several BGMEA leaders were also present at the meeting.
