Image description

The reduction in reciprocal tariff of the United States on imports of Bangladeshi goods to 20 per cent from previously announced 35 per cent brought relief for the country’s exporters.

Welcoming the move by the United States, they said that as the tariffs imposed on Bangladesh’s major competitors were almost same or higher, it would open new windows on the North American market.


Talking to ¶¶Òõ¾«Æ·, Mahmud Hasan Khan Babu, president of the Bangladesh Garment Manufacturers and Exporters Association, said that the reduction in tariff was good news for them.

However, businesses also expressed concern that the tariff on Bangladeshi goods might reduce the buying capacity of American consumers and diminish consumer demand.

On Friday, US president Donald J Trump unveiled revised reciprocal tariff on 70 countries, including Bangladesh, ranging 10 per cent to 41 per cent.

Earlier on July 8, Trump imposed 35 per cent reciprocal tariff on Bangladesh, which was lowered from 37 per cent announced on April 2.

After a series of negotiations over the past month, finally the US imposed 20 per cent tariff on the country.

Among major competitors of Bangladesh in the readymade garment sector, the US unveiled tariff rates at 25 per cent for India, 20 per cent for Vietnam, 19 per cent for Pakistan, Indonesia and Cambodia and 20 per cent for Sri Lanka.

However, tariff on China is yet to be declared as negotiations are underway.

‘Our tariff rate is equal or slightly lower and higher to most of our competitors. The uncertainty on tariff rates has been removed and we got some overall relief,’ said Mahmud Hasan Khan Babu.

However, he expressed concern that as the US buyers would have to pay 20 per cent more duty than before, it may impact their buying capacity as local consumers’ consumption might decrease, he added.

However, in the long run, Bangladesh could overcome this challenge as rates are now relatively normal compared to major rivals, he added.

The US is the largest export destinations of Bangladesh, where the country exported goods worth about $8.4 billion in 2024 calendar year, of which $7.34 billion accounted for readymade garments. In the year, Bangladesh imported US goods worth $2.2 billion.

Fazlee Shamim Ehsan, executive president of the Bangladesh Knitwear Manufacturers and Exporters Association, said that the tariff might lead to a slight increase in retail prices, potentially decline orders temporarily and buyers would attempt to push the price lower.

However, to benefit from this opportunity, entrepreneurs must become more efficient and strategic and the only viable strategy is negotiation, he said.

‘Wherever buyers go, they will face at least equal tariffs,’ he added, saying that through negotiation and strong positions, Bangladesh could attract orders shifting from China.

Sparrow Group deals with most prominent 11 US brands and sends their 50 per cent of export products to the US.

Shovon Islam, managing director of Sparrow Group, said that they were relieved that the US had announced a reduced reciprocal tariff.

‘Certainly the parity with competitors offers a fairer playing field, but we must strengthen our competitiveness through design innovation, industrial engineering, efficiency improvements and product diversification,’ he added.

Regarding the outstanding shipments, he said that they were engaging with the buyers from Friday to negotiate sharing the additional tariff burden, especially for shipments on hold since July 31.

‘We hope for constructive solutions as the buyers also expressed their comfort after announcing of the new tariff. They have confidence in us,’ he added.

He also said that initially there would be order shortage, but in the long run, the situation would change in our favour.

Echoing the same, former BGMEA director Mohiuddin Rubel said that despite potential short-term impacts on US sales due to increased retail prices, historical resilience suggested Bangladesh was primed for long-term success. 

‘Notably, compared to India and China, which have higher tariffs, this move sets Bangladesh apart, potentially attracting business from China,’ he added.

Businesses also said that there would not be any possibilities to shift orders to India.

However, to grab the opportunity, government policy supports, continuous innovation, design studios are must.

On April 9, Washington paused the tariffs for three months, giving countries an opportunity to negotiate, which ended on July 9. Trump sent letters to country heads on July 8 setting new tariff rates and gave until 31 July to reach trade agreements with the US.

During this time, Bangladesh conducted a series of negotiation and agreed to purchase Boeing aircrafts and wheat to reduce trade deficit with the US.

A Bangladeshi delegation, led by commerce adviser Sk Bashir Uddin, sat for three rounds of discussion with the US. 

On July 31, which was August 1 in Bangladesh time, the White House announced a reduction of tariffs on 70 countries, including the 20-per cent on Bangladesh.