Bangladeshi exporters are hopeful that the United States will grant a tariff waiver amid ongoing negotiations between the two countries, as fears grow over the potential economic impact of a steep hike in reciprocal duties.
Bangladesh currently pays an average 15.5% duty on exports to the US. However, in April, the Trump administration announced an additional 37% tariff, raising the total to 52%, with a 90-day suspension period ending on 9 July.
This move has sparked concern among business leaders, who say such high tariffs could severely harm exports, especially in the ready-made garment (RMG) sector.
Exporters call for cooperation
“We expect the US will act reasonably to support Bangladesh’s economy,” said Dr Md Aynul Islam, a former general secretary of the Bangladesh Economic Association. “Our negotiators must be strategic, or we risk a sharp fall in exports to the US – our largest market.”
The US-Vietnam trade deal – reducing tariffs on Vietnamese goods from 46% to 20% – has raised hopes that Bangladesh could also secure concessions.
Exporters are urging the US to consider Bangladesh’s LDC (Least Developed Country) status and long-standing trade ties in determining tariff policies.
High stakes for RMG sector
“The US is our single largest market, and RMG accounts for 84% of our total exports,” said Shovon Islam, managing director of Sparrow Group and former Bangladesh Garments Manufacturer and Exporters Association (BGMEA) director.
“Favourable duty arrangements are critical for our economic survival and growth.”
Emphasising the need for strategic alignment with US policies, including adherence to international sanctions where necessary, to unlock better trade terms, he said, “We are open to broader cooperation, such as importing LNG and cotton from the US, and partnering in energy and tech sectors.”
Growing role of US investors and trade strategy
Syed Ershad Ahmed, president of the American Chamber of Commerce in Bangladesh (AmCham), expressed optimism about a positive outcome from the upcoming meeting on 9 July when the 90-day suspension period on additional US tariffs is set to expire.
“If the tariffs are not reduced, there will be a direct impact on Bangladesh’s exports and imports, and an indirect effect on foreign direct investment (FDI),” he cautioned. AmCham has submitted a formal recommendation urging both governments to pursue a bilateral trade agreement.
Syed Ershad also suggested establishing a cotton warehouse in Bangladesh to support increased imports from the US, a move he said would streamline supply chains, lower costs, and strengthen bilateral trade ties.
Concerns over domestic policy moves
However, local policy changes may complicate matters. Md Shahid Alam, director of the Bangladesh Textile Mills Association (BTMA), criticised the imposition of a 2% advance income tax (AIT) on imported cotton.
“The US wants to export more to Bangladesh, yet our government is making imports costlier,” he said.
He also said that US cotton is already more expensive than that of India or Australia, and higher tariffs will further hurt competitiveness.
Tariff relief crucial to stay competitive
Faisal Samad, BGMEA director and managing director of Surma Garments Ltd, said RMG exports to the US have grown 40.45% in the past five years, driven by price, quality and product diversification.
“We have seen buyers shift from China to Bangladesh, especially in synthetic fibre products. Maintaining this edge requires fair tariff terms,” he said.
Mohiuddin Rubel, additional managing director of Denim Expert Ltd, echoed this view, expressing optimism that a “win-win deal” could be reached, given the US’s need for cotton-based products.
Talks continue ahead of deadline
Commerce Secretary Mahbubur Rahman confirmed that Bangladesh has held 26 rounds of communication, including virtual and in-person meetings, with US officials over the past three months.
“Despite our strong performance in the US market and proactive engagement, there has been no major breakthrough,” he told the media. “We remain hopeful, but the final decision rests with the US government.”
A follow-up meeting between Bangladeshi and US officials is scheduled for 9 July. National Security Adviser Khalilur Rahman and Commerce Adviser Sheikh Bashir Uddin are currently in Washington for negotiations.
Courtesy: Daily Sun.
Bd-pratidin English/TR
