BM Desk : The most common exports from Bangladesh to the US are leather goods, followed by ready-made clothing. Along with other nations worldwide, the Trump administration has announced a new hike in duties on shipments from Bangladesh. This has made exporters in this industry anxious and worried. They worry that higher tariffs will result in intense rivalry for exporters. In order to find cheaper products, American consumers will search for other nations. As a result, Bangladesh will export fewer leather goods.
The United States imposed a 35 percent tariff on Bangladesh’s exports. From 16 percent to 51 percent, this rate has increased. US importers will be required to pay $51 in customs if they purchase a $100 item from Bangladesh.
Exporters of leather and leather products have indicated that the annual market for shoes and leather goods in the United States exceeds $100 billion. Bangladesh’s annual exports of leather and leather products are valued between $80 and $100 million.
However, the Export Promotion Bureau (EPB) reports that the actual export figure to the United States is even greater. The EPB also notes that, in addition to leather and leather goods, various products that utilize less leather, such as suitcases, handbags, men’s and women’s bags, wallets, and accessories, are exported to the United States. In the fiscal year 2023-24, these items were exported to the United States for a total of $270 million. Notably, the export value was even higher in the recently concluded fiscal year.
Entrepreneurs express that the new tariffs imposed by the US are raising additional concerns, which may lead to a decline in exports. They urge the government to take prompt actions to sustain export growth. This includes reducing tariffs on imports from the United States and enhancing diplomatic communications. The appointment of lobbyists is also recommended. If tariffs cannot be lowered, they should at least be maintained at levels comparable to those of competing nations.
Md., the Senior Vice President of the Leather Goods and Footwear Manufacturers and Exporters Association of Bangladesh (LFMEAB) and Managing Director of Leatherex Footwear, Nazmul Hossain, informed Samakal that Bangladesh faces higher tariffs than its competitors, such as India, Pakistan, and Vietnam. If tariffs are equalized, Bangladesh would be in a more secure position. If the current tariff levels persist, it is likely that Bangladesh will see a reduction in purchase orders from US buyers, consequently leading to a decline in the country’s exports.
Abdul Awal, the acting president of the Bangladesh Finished Leather, Leather Goods and Footwear Exporters Association (BFLLFEA), stated that an increase in tariffs would negatively impact the leather sector’s exports. Bangladesh exports leather to various countries, including China, Europe, and Korea, with China being the largest market. However, Trump has already imposed high tariffs on Chinese exports, leading to pressure from Chinese buyers on Bangladesh to lower leather prices.
He noted that the tariffs in competing countries such as Vietnam and Cambodia are lower than those in Bangladesh. Consequently, buyers may seek alternative countries for imports at more competitive prices. The Chinese companies that have established factories in Bangladesh are likely to be the most affected.
To sustain the leather sector’s exports, Abdul Awal proposed three recommendations. First, appoint lobbyists to advocate for reduced tariffs on products exported from the US to Bangladesh. Second, continue strong diplomatic negotiations with the Trump administration. Third, if these efforts fail, the government should consider subsidizing exports to maintain access to the US market.
Mohiuddin Ahmed Mahin, a former president of the BFLLFEA, stated that the US poor and middle classes typically use Bangladeshi goods. At the moment, the US economy is in a bad state. The price of life has gone up. They will consequently buy fewer expensive shoes and leather goods, which will have an impact on Bangladesh’s exports.
According to Kamruzzaman Kamal, the marketing director of PRAN-RFL Group, they have begun exporting on a small scale. Tariffs will, however, also make their exports more difficult.
