President of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Mahmud Hasan Khan, has welcomed the recent decision by the United States to reduce the reciprocal tariff on Bangladeshi exports from 35 percent to 20 percent.
In a statement issued on Friday, Khan described the move as a significant relief for the country’s garment sector, which has been grappling with uncertainty over the past three months.
According to Khan, the prolonged period of unpredictability surrounding tariff rates had made it difficult for businesses to operate smoothly. Both Bangladeshi exporters and US buyers were uncertain about the future, which disrupted the usual flow of trade. The tariff reduction, he said, restores some much-needed stability and predictability to the market.
He also mentioned that while Bangladesh’s new tariff rate is still 1 percent higher than that of its competitor Pakistan, it is 5 percent lower than India’s and 10 percent lower than China’s. This comparative advantage, Khan believes, will help sustain Bangladesh’s competitiveness in the US market.
Despite the positive development, the BGMEA president warned of potential short-term disruptions. With higher tariffs now applicable on US imports from Bangladesh than before, American buyers may find their capital stretched. If they are unable to secure additional financing, they might reduce order volumes. Ultimately, the extra cost of the tariffs is expected to be passed down to US consumers, which could lead to higher retail prices and potentially a drop in overall sales.
Khan pointed out that the impact of recent US trade policies has already been felt.
Since April, the Trump administration has imposed a minimum 10 percent reciprocal tariff on imports from all countries. Some US buyers responded by pressuring suppliers in Bangladesh to share the additional cost burden.
He emphasised that going forward, this duty must be borne by the importers and buyer companies, and not by Bangladeshi manufacturers. He stressed the importance of clearly communicating this position to all BGMEA members and stakeholders.
Referring to the situation with China, he said that the country is currently facing a 30 percent counter-tariff, with further increases likely. If China’s final tariff rate remains higher than Bangladesh’s, there is a strong possibility that more orders will be redirected from China to Bangladesh.
He sees this as a potential opportunity for expansion but cautioned that for Bangladesh to take full advantage of it, infrastructure and policy support must be in place.
He specifically mentioned the need for a reliable energy supply, expanded capacity at the Chittagong Port, and continued political stability.
Khan also commented on the broader trade agreement, stating that so far only the draft or summary has been shared publicly. He expressed hope that the final deal has been negotiated in a way that protects Bangladesh’s trade and national interests.
He highlighted the importance of following through on the commitments made during the counter-tariff negotiations. These include short-term purchases of wheat, cotton, and LNG, as well as long-term commitments like aircraft procurement.
The BGMEA president warned that any failure to honour these agreements could put them in a difficult situation again.
