Grateful thanks to those who worked tirelessly on the tariff negotiation process with the U.S. U.S. buyers now have to pay a 20% reciprocal tariff on top of the existing MFN rate of 16.5%, bringing the total tariff burden on Bangladeshi apparel to 36.5%. The revised tariff regime is expected to bring a mixed impact presenting both opportunities and challenges for Bangladesh’s RMG sector. Let’s explore both the hopeful prospects and potential worst-case scenarios stemming from this situation.
Firstly, all our major competitors will now face the newly imposed reciprocal tariff, in addition to existing tariffs on RMG products (which are zero only for countries in North and South America, Israel, Jordan, Egypt, and a few African nations). Countries like China and India will bear higher overall duties than Bangladesh, keeping us relatively competitive in the U.S. market.
China still faces extraordinarily high tariffs. As a result, some orders may shift from China to Bangladesh. Moreover, there is a possibility of Chinese conglomerates investing in Bangladesh if the situation persists. By establishing manufacturing units here, they could use Bangladesh as a neutral ground to gain tariff benefits.
In reality, US buyers will now have to pay 20% more duty than before, their buying capacity and local consumers’ consumption will decrease. Initially, our exports will take a hit, and we will face some price pressure from the buyers. But in the long run, Bangladesh will overcome this challenge as rates are now relatively normal compared to rival countries.
Another alarming point is the growth of U.S. apparel imports significantly slowed as fashion companies shifted from eagerly piling up stock to the wait-and-see mode. This means we are unlikely to see large-scale purchase orders like before from the US buyers.
U.S. consumer confidence has already fallen sharply, just thinking that after this reciprocal tariff each the price of garments will surely rise in the US market and consumer confidence will fall further. This could lead to a steep drop in U.S. apparel imports ahead. So we could possibly see the decline in order trends.
A few months ago, I came across a report warning that U.S. apparel imports are becoming increasingly expensive. Measured in dollars per square meters equivalent (SME), the unit price of U.S. apparel imports averaged $3.06/SME in the first two months of 2025, up from $3.03/SME a year ago (or a 1.3% increase). The unit price of U.S. apparel imports from many leading Asian countries rose at a notably higher rate, including China (up 2.9%), Vietnam (up 3.6%), and Bangladesh (up 2.6%), as well as those from Mexico (up 4.7%) and CAFTA-DR (up 0.6%).
This trend highlights the growing sourcing and production cost pressures faced by U.S. fashion companies and their suppliers, driven by rising labor costs, raw material prices, and tariff uncertainty.
Yes, challenges are real. But Bangladesh still has a chance to come out stronger if we play it smart, attract investment, and stay flexible in strategy.
Ziaur Rahman Rabbi, BSc in Textile Engineering, MBA (BUP), PGD-GB (IBA –DU)
Deputy Manager (Sales & Marketing)
Youngone Corporation, Materials Division
