Bangladesh’s garment industry faces an uncertain future as experts warn that the proposed 35% tariff by the Trump administration could deal a severe blow to the country’s US $ 8.4 billion export sector to the United States. With the potential for increased costs and lost market share, industry leaders and economists express grave concern over the economic and social repercussions.
Trade experts highlight that, currently, a US $ 10 polo shirt shipped from Bangladesh to the US incurs a 16% import duty, raising its price to approximately US $ 11.16. However, if the new tariff is implemented, the same shirt could cost around US $ 15.10, a 51% increase, significantly reducing Bangladesh’s competitiveness. Fazlul Hoque, former president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), questioned the industry’s ability to compete under such conditions.
Economists and industry insiders warn that the repercussions extend beyond individual factories. Dr. Fahmida Khatun, executive director of the Centre for Policy Dialogue, emphasised that a 35% tariff would make it “extremely difficult” for Bangladesh to maintain its current export levels, potentially leading to widespread job losses among millions of workers, many of whom are women. She cautioned that the ripple effect could impact banking, transportation, ports, and other sectors integral to the export economy.
Several experts pointed out that Bangladesh’s tariff exposure is disproportionately high compared to competitors. Mohammad Abdur Razzaque, chairman of RAPID, noted that if the duties go into effect, Bangladesh’s exports could diminish significantly, with US buyers shifting orders to countries like Vietnam, India, and Pakistan, which face lower tariffs. “This will erode Bangladesh’s price advantage and threaten economic stability,” Razzaque said.
Industry leaders are also expressing concern over the lack of private sector involvement in the tariff negotiations. Fazlul Hoque criticised the government for excluding private exporters from discussions with the US, calling it a “major failure.” Shams Mahmud, managing director of Shasha Denims, echoed this sentiment, warning that the absence of private sector input could lead to poorly informed decisions that harm the industry.
Despite the bleak outlook, some industry figures remain cautiously optimistic. MA Jabbar, managing director of DBL Group, suggested that while pricing challenges will intensify, Bangladesh might not suffer a “massive loss” in US market share because Vietnam and other competitors currently lack the capacity to absorb large volumes of orders. Similarly, ABM Shamsuddin of Hannan Group expressed hope that, at least in the short term, Bangladesh’s existing production capacity could help mitigate some of the impact.
As the 1st August deadline approaches, the key question remains whether Bangladesh can negotiate its way out of the tariff’s reach. Experts agree that the window for effective diplomacy is narrow, and the stakes are high, not just for the garment industry, but for the livelihoods of millions of workers and the broader economic stability of Bangladesh.
In summary, while some industry voices hold a glimmer of hope, most analysts concur that the proposed tariffs pose a significant threat to Bangladesh’s export future, with potential ripple effects that could stretch across the country’s social and economic landscape.
