Bangladesh Seeks Trade deal with US to Avert Tariff Hikes on Garments
Table of Contents
- Bangladesh Seeks Trade deal with US to Avert Tariff Hikes on Garments
- Bangladesh Proposes Trade Package to Reduce Deficit
- Trump-Era tariffs Loom Over Garment Industry
- Industry Leaders Express Mixed Reactions
- Bangladesh’s Garment Exports to the US: Key Figures
- Government Intervention and diplomatic Efforts
- Evergreen Insights: the Importance of Trade for bangladesh
- Frequently Asked Questions About Bangladesh-US Trade Relations
Dhaka is scrambling to finalize a trade agreement with the united States before looming tariffs threaten its vital garment industry, the world’s second-largest garment manufacturer. With the July 9th deadline fast approaching, Bangladesh is offering to boost imports of U.S. goods, including Boeing aircraft, wheat, cotton, and oil, in exchange for tariff relief.
Bangladesh Proposes Trade Package to Reduce Deficit
Bangladesh has proposed a reciprocal trade agreement to the United States in an effort to avert potentially devastating tariffs on its garment exports. The proposal aims to reduce the trade deficit by increasing Bangladesh’s imports of key U.S. products. This includes a significant purchase of 14 Boeing aircraft, along with increased volumes of wheat, cotton, and oil from U.S. farms.
Mahbubur Rahman, a top commerce official, stated that the government is “hopeful of reaching a win-win agreement” and that a meeting between officials from both countries was scheduled for July 8th. The U.S. currently represents 20% of Bangladesh’s ready-made garment exports.
Did You Know? Bangladesh’s economy is growing faster than those of its neighbors and is likely to shed its “Least Developed Country” status by 2024 [[2]].
Trump-Era tariffs Loom Over Garment Industry
The potential tariffs stem from measures enacted earlier in 2025, when Bangladesh was hit with a 37% tariff on certain goods, more than double the existing 16% levy on cotton products. While the introduction of these tariffs was initially suspended until July 9th,a baseline 10% levy remains in place.
In 2024, Bangladesh exported $8.36 billion worth of goods to the United States, while imports from the U.S. totaled $2.21 billion, according to data from the Bangladesh Bank and the National Board of revenue.
Industry Leaders Express Mixed Reactions
While the government expresses optimism,concerns linger within the garment industry. Mahmud Hasan Khan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), warned that the existing 10% tariff is already impacting exporters and that further increases could led to a loss of U.S. buyers.
However, Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), remains optimistic about a positive outcome before the July 9th deadline. He argues that ultimately, higher tariffs would hurt U.S. buyers, who would face increased prices.
Pro Tip: Monitoring trade negotiations and diversifying export markets can help businesses mitigate risks associated with tariff fluctuations.
Bangladesh’s Garment Exports to the US: Key Figures
| Metric | Value (USD) |
|---|---|
| Bangladesh Exports to US (2024) | $8.36 Billion |
| US Exports to Bangladesh (2024) | $2.21 Billion |
| US Share of Bangladesh Garment Exports | 20% |
Government Intervention and diplomatic Efforts
Interim leader Muhammad Yunus recently spoke with U.S. Secretary of State Marco Rubio, assuring him that Dhaka is actively working with U.S. officials to finalize measures that address the U.S. trade agenda. This highlights the high-level engagement aimed at resolving the tariff dispute.
Evergreen Insights: the Importance of Trade for bangladesh
Bangladesh’s economic trajectory is heavily reliant on international trade, particularly its garment exports. The country has made significant strides in economic advancement, aiming to graduate from its Least Developed Country (LDC) status.Maintaining favorable trade relations with major partners like the United States is crucial for sustaining this growth.
Climate change also poses a significant threat to Bangladesh, potentially impacting its agricultural sector and displacing communities [[1]]. Economic stability through trade can help the nation build resilience against these environmental challenges.
Frequently Asked Questions About Bangladesh-US Trade Relations
- Why is Bangladesh seeking a trade deal with the United States?
- bangladesh is pursuing a trade agreement with the U.S. to mitigate the impact of potential tariff increases, particularly on its garment exports, which constitute a significant portion of its economy.
- What does Bangladesh propose in its trade deal with the US?
- Bangladesh’s proposal includes increasing imports of U.S. goods like wheat, cotton, and oil, as well as purchasing Boeing aircraft, to reduce the trade deficit between the two countries.
- What percentage of Bangladesh’s garment exports go to the US?
- The United States accounts for approximately 20% of Bangladesh’s ready-made garment exports, making it a crucial market for the country’s textile industry.
- What are the potential consequences if the US imposes higher tariffs on Bangladesh?
- Increased tariffs could negatively impact Bangladesh’s exporters, potentially leading to a loss of U.S. buyers and reduced competitiveness in the global market.However,some argue that the ultimate burden would fall on U.S. consumers through higher prices.
- How significant is the garment industry to Bangladesh’s economy?
- the textile and garment industry is a cornerstone of Bangladesh’s economy, accounting for about 8% of the nation’s total exports. The country is the world’s second-biggest garment manufacturer.
- What was the value of goods Bangladesh exported to the US in 2024?
- In 2024, Bangladesh exported approximately $8.36 billion worth of goods to the United States, while importing $2.21 billion in return.
- What is the current status of the proposed US tariffs on Bangladesh?
- While a 10% baseline levy remains, the introduction of additional tariffs, initially slated to take effect in April 2025, was temporarily suspended until July 9, 2025, giving both countries time to negotiate a trade agreement.
Will bangladesh and the U.S. reach a trade agreement in time? How will these negotiations impact the global garment industry? Share your thoughts in the comments below!
