Will Bangladesh’s garment exports be affected by Trump’s retaliatory tariffs?
Bangladeshi garment industry entrepreneurs are worried about US President Donald Trump’s imposition of reciprocal tariffs or counter-tariffs on various countries around the world. Because Trump’s decision will impose an additional 37 percent tariff on Bangladeshi products. So far, the country has had an average tariff of 15 percent on Bangladeshi products.
The single largest market for Bangladeshi garment is the United States. The United States was the destination for 18 percent of the total garment exports in the 2023-24 fiscal year. As a result, entrepreneurs are increasingly concerned about what will happen to Bangladesh’s garment exports due to Trump’s counter-tariffs. Although Trump’s counter-tariffs have been imposed on almost all garment exporting countries in the market. Among the top ten garment exporting countries, only Mexico has not been subject to this new tariff. As a result, garment exporters are still not clear about how negative the counter-tariffs will be on Bangladesh’s garment exports. They say that the new tariff will have a greater or lesser impact. The main reason for this is that the increase in tariffs will increase the price of goods in the US market. As a result, the demand for goods will decrease. After reviewing these effects, discussions should be started with the US government to reduce the countervailing duties as soon as possible at the government level. If necessary, the pressure of countervailing duties should be reduced by reducing import duties on US products. Otherwise, it will be difficult to survive in the competition.
According to the Office of Textiles and Apparel (OTEXA) under the US Department of Commerce, last year, US importers imported $79.26 billion worth of ready-made garments from different countries around the world. The top ready-made garment exporters in this market are China, Vietnam, Bangladesh, Indonesia, India, Mexico, Honduras, Cambodia, Pakistan, and South Korea.
Bangladesh has long been the third-largest exporter of ready-made garments in the US market. Last year (2024), Bangladesh exported $7.34 billion worth of ready-made garments. This export is 0.73 percent more than the previous year. Last year, the price of a square meter of clothing exported from Bangladesh was $3.10.
When asked, Mohammad Hatem, president of the knitwear industry owners’ association BKMEA, told Prothom Alo, “The countervailing duty will have a major impact on ready-made garment exports. However, there are challenges and opportunities. Bangladesh should reduce import duties on US products. Since not many products come from the country, there will be much loss. On the contrary, if the countervailing duty is reduced, the export of ready-made garments and other products will increase.” He added, “We are making clothes by importing cotton from the US. A large part of those clothes are being exported to the US. As a result, the current interim government can take steps to obtain duty-free benefits for exporting products manufactured using US raw materials to their country.”
China has always been at the top of the US market. Last year, China exported ready-made garments worth $16.51 billion to this market. Donald Trump imposed additional duties on Chinese products during his first term as president. China imposed duties on US products as a counter-trade measure. Due to the trade war between the two countries, China’s ready-made garment exports to the US market have been declining. After taking office for the second term, Trump imposed an additional 10 percent tariff. Now, the US President has imposed a 34 percent counter-tariff. This threatens to reduce China’s ready-made garment exports again.
Vietnam is the second largest exporter of ready-made garments to the US market. Vietnam exported $14.98 billion worth of ready-made garments last year. This export is 5.67 percent more than in 2023. Donald Trump has imposed a higher counter-tariff on Vietnam than China and Bangladesh, 46 percent. As a result, the pace at which the country’s ready-made garment exports have been growing in the past few years may slow down.
The fourth largest exporter of ready-made garments to the US market is India. Last year, the country exported $4.69 billion worth of ready-made garments. Their growth was 4.95 percent. President Trump has imposed a 26 percent counter-tariff on India. Since the countervailing duties are lower than those of competing countries and the government has launched various incentive packages for the ready-made garment and textile sector, there is a possibility of an increase in purchase orders in India.
In addition, Donald Trump has imposed a 32 percent countervailing duty on Indonesia, the fifth top exporter of ready-made garments in the US market. Last year, Indonesia exported ready-made garments worth $4.25 billion. In addition, 10 percent countervailing duties have been imposed on Honduras, 49 percent on Cambodia, 29 percent on Pakistan, and 17 percent on South Korea. Although countervailing duties have not been imposed on Mexico now, the Trump administration imposed a 25 percent duty last February. This means that none of the top ten ready-made garment exporters are comfortable.
When asked, former BKMEA President Fazlul Haque told Prothom Alo, “I do not think that the imposition of countervailing duties will cause a collapse in ready-made garment exports to the US right now. It is not certain whether President Trump’s policy will be sustainable or not.” Because, the pressure of additional tariffs will ultimately fall on the consumers. As a result, there will be a strong reaction among them. He also said, “Under the pressure of counter-tariffs, US buyer companies may first pressure us to reduce the prices of our garments. Buyers may also ask us to reduce the prices of the purchase orders that we have now. As a result, we must collectively prepare to handle that pressure. The government should hold talks with the private sector.
