Bangladesh’s garment industry stands to benefit from partial tariff exemptions on exports to the United States when using US raw materials, specifically cotton. The provision was included in President Donald Trump’s latest executive order issued on 31st July, which aims to modify existing counter-tariff measures.
Under the new rules, Bangladeshi garments made with at least 20% US cotton will be eligible for exemption from additional tariffs. Mahmud Hasan Khan, President of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), confirmed the details during a press conference held at the BGMEA headquarters.
Khan emphasised the importance of ensuring proper enforcement of this clause by US Customs, noting that it could significantly reduce production costs and lower the price of US cotton for Bangladeshi producers.
He highlighted that approximately 75% of Bangladesh’s US exports are cotton-based garments. According to the new executive order, if a minimum of 20% American raw materials are used in production, the additional 20% tariffs will be waived, providing a valuable tariff relief for exporters.
The BGMEA President also warned that ongoing negotiations regarding trade or security agreements with other countries could influence future tariff rates.
Industry leaders and officials from BGMEA attended the briefing as the organisation seeks to leverage this development to bolster Bangladesh’s garment exports to the US market amidst ongoing trade policy adjustments.
