Bangladesh has a chance to expand its market share thanks to the lower rate, but only if we guarantee a steady supply of electricity, expand Chattogram Port’s capacity, and uphold political stability, he said.
Mahmud Hasan Khan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), commented on the recent US decision to lower duties on Bangladeshi imports, saying the action provides much-needed relief to Bangladesh’s garment industry following months of uncertainty.
Because of reciprocal tariffs, we have been operating in a state of significant uncertainty for the last three months. It is very challenging to conduct business in such circumstances,” he stated in a statement released today, August 1.
US purchasers were also keeping a close eye on the developments. Ultimately, the reduction of the tariff from 35% to 20% provides us with some reassurance.
Mahmud pointed out that Bangladesh has repeatedly cautioned that imposing higher countervailing duties than those of competing nations would render business operations unsustainable. “Although our tariff is 1% higher than that of Pakistan, it is 5% lower than India’s and 10% lower than China’s, which is a relief for us.”
He recognized that the increased tariff could have a temporary effect on trade volumes.
“Higher import duties imply that US buyers will need to pay more upfront, which could put a strain on their finances. If they are unable to secure additional funding, they may cut back on orders. Ultimately, these extra costs are likely to be transferred to consumers, potentially resulting in a drop in retail sales.”
Mahmud recalled that the initial round of US tariffs, enacted by the Trump administration in April, established a minimum countervailing duty of 10% on goods from all nations.
“US buyers managed this in various ways, but in some instances, suppliers in Bangladesh were compelled to absorb some of the costs. I want to make it clear to our BGMEA members: this time, it is the duty of importers and buyers to shoulder these additional tariffs, which will ultimately affect US consumers.”
He mentioned that China is still subject to a 30% countervailing tariff, with final rates yet to be determined. “Preliminary indications suggest that China’s final rate will not be lower than ours, indicating that the transfer of orders from China to other countries is likely to persist.
Bangladesh now has the chance to increase its market share, but only if we maintain political stability, improve Chattogram Port’s capacity, and guarantee a steady supply of electricity.”
Although the current trade agreement’s specifics are still unknown, Mahmud said he had faith in Bangladesh’s negotiating team. “We trust that the country’s and the business sector’s interests were taken into consideration when the deal was finalized.”
He emphasized that Bangladesh must fulfill all of its obligations under the terms of the agreements. These include short-term obligations like importing cotton, wheat, and LNG as well as long-term ones like purchasing airplanes. “There can be additional challenges if they are not met,” he said.
