The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has expressed grave concern over the United States’ proposal to impose a 35% tariff on Bangladeshi goods, warning that such a move could force many garment factories to shut down.
According to BGMEA President Mahmud Hasan Khan, the proposed tariff would significantly increase the total duty on Bangladeshi apparel exports to nearly 50%, posing a severe threat to the country’s readymade garment sector.
“We had earlier warned that such a high tariff rate would create a major risk for Bangladesh`s apparel industry,” he stated, while remaining cautiously optimistic as discussions between Bangladesh and the US are still ongoing. A final decision is expected by August 1.
Mahmud noted that currently, Bangladeshi apparel enters the US market with an average tariff of around 15%.
If the additional 35% tariff is implemented, the total duty would almost triple, severely undermining the sector`s competitiveness.
He emphasized that in 2024, Bangladesh exported garments worth approximately $7.34 billion to the US. If a 50% tariff is enforced, over $3.5 billion would be lost solely in duty payments.
“The burden of this additional tariff will not be borne by US importers alone. They may turn to other sourcing countries like Vietnam or India, which offer lower costs,” he added.
He pointed out that the US and Vietnam have already entered into an agreement that allows garment imports at a 20% tariff, further increasing the pressure on Bangladesh.
Highlighting the potential consequences, Mahmud warned that such high tariffs would increase export costs and lead to a loss of market share in the US. “Currently, the US accounts for about 20% of Bangladesh’s total garment exports. However, Vietnam’s position in the same market is even stronger. To survive in this competition, we would need to reduce our prices, which will strain our production costs,” he explained.
He further warned that small and medium-sized factories would be the hardest hit, with many facing possible closure if the proposed tariffs are implemented.
“We are already facing multiple challenges. If this new tariff is imposed, the losses could multiply dramatically,” he cautioned.
Mahmud concluded by saying that the industry is assessing the full scope of the potential impact and urged the government to treat the matter with urgency.
He called for diplomatic efforts to address the issue and prevent a crisis in the country’s most vital export sector.
