The United States has announced it will impose a 35% trade tariff on Bangladeshi imports starting 1st August, a slight reduction from the initially proposed 37% but still a major setback for the country’s readymade garment (RMG) industry, according to a Reuters report.
This decision comes as the three-month suspension period on reciprocal tariffs expires, marking a new phase in the global trade conflict initiated by President Donald Trump earlier this year. Bangladesh, one of 14 countries targeted in this round of tariff hikes, finds itself facing one of the steepest rates.
While officials in Dhaka had lobbied for a more favourable 20% tariff, similar to what Vietnam secured, the US administration has held firm. A Bangladeshi delegation is currently in Washington for last-ditch talks with the Office of the United States Trade Representative. However, unless a revised bilateral agreement is reached before the 1st August deadline, the 35% tariff will take effect.
The implications for Bangladesh’s export-oriented economy, particularly the RMG sector, are severe. With garments accounting for over 80% of the country’s total exports, and the US being its single largest market, the elevated tariff is expected to deal a heavy blow. In 2024 alone, Bangladesh exported approximately US $ 8.5 billion worth of goods to the US, most of it from the garment sector.
What adds to the concern is the lack of clarity over how other competing exporters, including Vietnam, India, Indonesia, Sri Lanka, and Pakistan, will be treated under the reciprocal tariff regime. If these countries secure more favorable terms, Bangladesh could find itself at a serious disadvantage in global supply chains.
President Trump’s administration has also warned against retaliation. In a letter addressed to Chief Adviser Muhammad Yunus and shared via the president’s Truth Social platform, he wrote: “If for any reason you decide to raise your tariffs, then, whatever the number you choose to raise them by, will be added onto the 35% that we charge.”
Trade analysts argue that the rationale behind targeting Bangladesh, a relatively minor contributor to the US trade deficit, is weak. Yet the consequences are potentially far-reaching.
In response, experts are calling for an urgent rethinking of Bangladesh’s trade strategy. They highlight the need for:
Investing in new sectors and moving beyond garments to reduce dependence on a narrow export base.
Proactively pursuing free trade agreements with Asian, African, and Latin American countries to open up new markets.
Additionally, lowering tariffs, simplifying procedures, and making the investment climate more competitive to attract global buyers.
With global trade rules in flux and geopolitical pressures mounting, Bangladesh’s survival in the international market will depend on how swiftly and strategically it can respond.
