Two of Bangladesh’s leading clothing exporters have demanded that the government remove or significantly lower import taxes on American goods. They contend that in order to remain competitive in the global market versus other nations, reduced tariffs are necessary.
Shams Mahmud, managing director of Shasha Denims, emphasised that reducing tariffs to zero could lead to lower export duties on Bangladeshi goods sent to the US, which currently imposes a hefty 37 per cent tariff on Bangladeshi exports. He pointed out that with the recent tariff structure implemented during the Trump administration, apparel exports from neighboring countries like India and Pakistan may become more attractive to American consumers due to their reduced duties on US goods.
“To remain competitive in the US market, we must bring down import duties on American products to zero,” Mahmud stated. He highlighted that the existing US tariffs present significant challenges for Bangladesh, as the country faces higher export tariffs compared to its competitors. This situation, combined with uncertainty surrounding potential industry relocations from China, poses a threat to trade stability. He noted that Bangladesh’s reliance on import taxes for revenue now conflicts with the need to lower tariffs.
As Bangladesh approaches its graduation from Least Developed Country (LDC) status, the path ahead remains uncertain, necessitating a reevaluation of its trade strategies. Mahmud expressed concern that the apparel sector, which is heavily impacted by US tariffs, could jeopardize the country’s macroeconomic stability. “Overall, Bangladesh’s economic stability is likely to face stress,” he warned.
Mohiuddin Rubel, additional managing director of Denim Expert Ltd, echoed these sentiments, pointing out that Bangladesh is not alone in facing these tariffs. He noted that all 60 countries affected by the tariffs will experience repercussions. Despite this, he acknowledged that tariffs on Bangladesh’s competitors have also increased China is set to face a 34 per cent tariff, Vietnam 46 percent, Indonesia 32 per cent, and India 26 per cent.
“Clearly, all will suffer under these conditions,” Rubel remarked, adding that this could lead to rising costs for consumers in the US and contribute to higher inflation. He also mentioned the potential for increased exports from neighboring countries like Honduras as a result of these tariffs.
Rubel urged the Bangladeshi government to engage in negotiations with the US to minimize tariffs, stating, “We need to act quickly to ensure we can compete effectively with our rivals.”
