Report: Mizanur Rahman Liton | The Investor | August 2, 2025

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has welcomed the United States’ decision to reduce retaliatory tariffs on apparel imports from 35% to 20%, calling it a much-needed relief for the country’s largest export sector and a positive signal for future growth in the American market.

In a written statement issued on Friday evening (August 1), BGMEA President Mahmud Hasan Khan said the tariff reduction eases the uncertainty that had clouded trade with the US over the past three months.

“Since April, the increased retaliatory tariff created a sense of unpredictability, making it difficult for exporters to operate confidently. US buyers were also observing the situation closely,” he noted. “This downward revision of the tariff rate brings relief and improves Bangladesh’s competitive position globally.”

Khan pointed out that Bangladesh still faces a slightly higher tariff than Pakistan—by 1%—but remains better positioned than India, which is subject to 5% more, and China, which still faces a 10% higher rate. “This gives Bangladesh a favorable standing in the global sourcing landscape,” he said.

However, he warned that higher duties, even at 20%, could slow down short-term order flows. “Buyers may hesitate if they need to arrange additional financing. And if the increased cost passes down to end consumers, retail sales could be impacted.”

Reflecting on recent trade dynamics, Khan mentioned that in April, the Trump administration had imposed a 10% blanket retaliatory tariff across all countries. At that time, US buyers absorbed the cost in various ways. In some cases, Bangladeshi suppliers were pressured to shoulder a portion of the burden.

Against this backdrop, he urged BGMEA members to remain firm: “It is crucial to communicate clearly that the additional tariff must be borne by importers and buyers—and ultimately, the American consumer.”

Regarding China, Khan noted that the country continues to face a 30% retaliatory tariff, with a final determination on its full rate expected soon. He expressed confidence that China's tariff rate will not fall below that of Bangladesh, making it likely that more sourcing orders will shift from China to Bangladesh and other destinations.

“This is a window of opportunity for Bangladesh,” Khan observed, “but we must be ready to meet demand. That means ensuring adequate energy supply, expanding capacity at Chattogram Port, and maintaining political stability.”

Khan also commented on the ongoing trade agreement process between Bangladesh and the United States. “So far, we’ve only seen summaries and draft outlines of the agreement, not the full document. But we believe the negotiating team acted in the country’s best interest, considering ground realities.”

He also emphasized the importance of fulfilling the commitments made during negotiations, including both short-term deals—such as wheat, cotton, and LNG imports—and long-term projects like aircraft procurement. “If we fail to deliver on these promises, Bangladesh could face future complications,” he cautioned.