The United States has imposed a 35% tariff on garments imported from Bangladesh, sparking fresh concerns across the latter's apparel industry.

Combined with the previous 15% duty, the total tariff now stands at 50%. Industry leaders fear this steep rate will severely impact Bangladesh’s garment exports. 

In April, the US initially announced a 37% tariff, which was suspended for 90 days following appeals from Bangladesh and other nations. On Monday (7 July), President Donald Trump revised the rate to 35%, effective from August.

While Bangladesh faces a 35% tariff, competitor Vietnam secured a 20% rate through successful negotiations. This 15% gap is expected to shift US buyers toward Vietnam, reducing Bangladesh’s export share.

Bangladesh is the third-largest garment exporter to the US, which imports around $70 billion worth of apparel annually. In 2024, Bangladesh exported $7.3 billion in garments to the US, compared to $5.2 billion in 2020, $7.1 billion in 2021, and $9.7 billion in 2022.

The US is Bangladesh’s single largest export market, accounting for nearly 20% of total garment exports. From July to May of FY2024–25, Bangladesh earned $7.31 billion from garment exports to the US out of a total $36.55 billion. The sector has seen consistent growth over decades, but the new tariff threatens this trajectory.

Garments make up 90% of Bangladesh’s total exports to the US. Of the $7.59 billion earned in FY2023–24, $7.43 billion came from apparel. The remaining 10% came from leather, pharmaceuticals, plastics, and agricultural goods. A blow to garment exports could disrupt overall trade.

Exporters are frustrated, noting that Vietnam’s lower tariff poses a greater challenge than the rate hike itself. Matching Vietnam’s prices would mean a 15% loss for Bangladeshi producers.

Some entrepreneurs claim they were kept in the dark during interim government negotiations with the US. They fear buyers will exploit the situation, as they did during the April suspension period.

Shovon Islam, former director of BGMEA, said the new tariff gives Vietnam a clear advantage. He stressed that Bangladesh needed similar negotiation success. India faces a 26% tariff, while BRICS nations face threats of 10% duties. Pakistan and Vietnam, however, enjoy favorable terms, leaving Bangladesh in an uneven contest.

Bangladesh is transitioning from a least developed to a developing country, prompting the withdrawal of several trade incentives. Rising wages and workplace improvements have increased production costs. Entrepreneurs warn that high tariffs from a key market like the US could hinder this progress.

Former BIBM Director Toufic Ahmed Chowdhury criticized the US for disregarding WTO norms and acting arbitrarily. He urged Bangladesh to seize remaining negotiation opportunities.

Speaking to Banglanews, he emphasized the need for strategic bargaining to reduce tariffs. If unsuccessful, Bangladesh must adapt through local market advantages and past experience in overcoming adversity.

SMS/