Lower tariffs for rivals emerge as key challenge for BD’s apparel sector

The proposed imposition of a 35% countervailing duty on Bangladeshi goods by the United States is emerging as a serious concern for the country’s apparel industry.

When combined with the existing 15% duty, Bangladeshi garments may face a staggering 50% tariff in the US market—placing local exporters at a significant disadvantage.

Among Bangladesh’s major competitors in the sector, Vietnam was initially hit with a 46% duty, later reduced to 20%. Similarly, Indonesia successfully negotiated its tariff down from 32% to 19%, while India's revised duty may fall below 20%.

The relatively lower tariffs imposed on these competitor countries are likely to pose a serious challenge for Bangladesh, raising the spectre of an uneven playing field in the crucial US market.

Exporters warn that such high tariffs could cause Bangladesh—currently the third-largest apparel exporter to the US—to lose ground to India, which is now in fourth place.

If India secures a significantly lower duty rate, it could surpass Bangladesh in terms of export volume. The gap with Vietnam, which holds second place, would also widen, and even China—despite its existing trade issues—may benefit from a relatively better position.

According to the latest report from the US Office of Textiles and Apparel (OTEXA), a division of the US Department of Commerce, China retained its top position in US apparel imports in 2024, exporting goods worth $16.51 billion. Vietnam followed with $14.98 billion, while Bangladesh’s exports stood at $7.34 billion. India came fourth with $4.69 billion, and Indonesia fifth with $4.30 billion.

Other top ten exporters included Cambodia, Mexico, Pakistan, and South Korea. OTEXA’s data shows that this trend has remained relatively stable over the past decade.

Industry insiders stress that if the government fails to address the tariff gap through negotiations, it could result not only in declining orders but also jeopardise wages, employment, and social stability.

Without timely intervention, Bangladesh risks losing its hard-earned global reputation and longstanding achievements in the readymade garments (RMG) sector.

Distinguished Fellow at the Centre for Policy Dialogue (CPD), Dr Mostafizur Rahman, emphasised the importance of tracking Bangladesh’s position in comparison to its competitors.

“It’s vital to monitor how our rivals are faring in tariff negotiations. The US is one of Bangladesh’s most important markets and must be retained at all costs,” he said.

He also noted that countries like India are increasingly eyeing a stronger foothold in the US market and will seize every opportunity to gain ground.

Mohammad Mofiz Ullah Bablu, a member of the Bangladesh Garment Buying House Association and panel leader of the United Forum, pointed out that Bangladesh’s key competitors include Vietnam, Myanmar, India, Pakistan, and Cambodia.

“India currently still faces a 26% duty, but from the 1st [of next month], Bangladesh may have to bear a 50% duty—double the current rate,” he warned.

The consensus among stakeholders is clear: without swift and strategic action, Bangladesh’s apparel sector may face an uphill battle that threatens its dominance and reputation in the global export arena.