After months of uncertainty, the United States has finalized its reciprocal tariff rates for key exporting countries, slashing Bangladesh’s tariff from the earlier 35% proposal to 20%—a major relief for our RMG sector.
What’s Changed:
- Bangladesh: 20% (plus existing MFN average 16%, making effective rate 36%)
- Vietnam: 20%
- India: 25%
- Pakistan: 19%
- China* Still negotiating, currently faces 55% duty
Why This Matters for Bangladesh:
Bangladesh currently exports $8.2 billion in apparel to the US and holds a 9.3% share of the US apparel import market (worth $80 billion). The reduced tariff keeps us competitive, especially as:
- China faces 55% duties, shifting US orders away from them
- Vietnam relies heavily on Chinese raw materials and faces penalties for transhipment
- India’s higher tariff (25%) and production scale limitations strengthen Bangladesh’s position
Top Five Garment Categories—shirts, polos, trousers, underwear, and sweaters—make up 80% of our US exports and will face lower effective duties than premium segments like jackets and activewear.
But Challenges Remain:
- Effective duty still averages 36%, putting pressure on exporters
- US buyers are expected to negotiate harder on prices, creating margin pressures
- Small and medium manufacturers may struggle without collective industry action
The Opportunity:
With strategic moves—diversifying markets, improving infrastructure, ensuring uninterrupted energy supply, and investing in high-value product development—Bangladesh can turn this challenge into growth and strengthen its position as a global sourcing hub.
