Bangladesh, US negotiate to avert 35 percent tariff on textile exports

Trade negotiations between the US and Bangladesh officially resumed on Tuesday, July 29, in Washington, D.C. These talks are taking place amidst significant protectionist pressure from the Trump administration. The aim is to prevent the imminent implementation of punitive tariffs, which could reach 35 percent, on Bangladeshi exports, primarily textiles, to the US market.

Bangladesh and the US begin trade negotiations

Announced by the Bangladeshi Ministry of Commerce, this third and final round of negotiations with the United States Trade Representative (USTR) is being attended by a delegation led by Sk Bashir Uddin, advisor on foreign trade, and Mahbubur Rahman, commerce secretary. While these are technical discussions between government representatives, members of the private textile sector are also present in Washington, D.C., although they are not directly participating, reports Apparel Resources.

The date of August 1 represents a potential turning point. Without an agreement, the US will impose a sharp increase in tariffs to 35 percent, up from approximately 16 percent. This measure would threaten thousands of jobs in Bangladesh, where the ready-to-wear sector accounts for 80 percent of exports and is heavily reliant on the US market, which absorbs nearly 20 percent of volumes.

To try to reverse this trend, Dhaka has made several goodwill gestures. The government has proposed the duty-free import of US agricultural and energy products – wheat, cotton, and liquefied natural gas, among others. It has also signed an agreement to purchase up to 25 Boeing aircraft, according to Reuters.

To date, the US has granted tariff reductions to several Asian countries, lowering their rates to 15 percent for Japan, 20 percent for Vietnam, and 19 percent for the Philippines, reports Apparel Resources. Dhaka hopes to obtain similar treatment.

In parallel, the Bangladeshi private sector has attempted to recruit a US lobbying firm. However, the results have been minimal due to a lack of time and clear commitment from the state. An inter-ministerial meeting, held on July 20, formalised the ongoing negotiation points, focusing in particular on increasing imports of US products.

Significant consequences for the textile industry

The stakes are enormous. In 2024, Bangladesh exported over 8 billion dollars worth of goods to the US but only imported 2.2 billion dollars. This is a trade imbalance that the US administration wants to correct.

According to the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), 1,322 textile factories export to the US. An increase in tariffs would directly affect their competitiveness, with a significant risk of order losses and customer relocation.

The outcome of these discussions, scheduled over two or three days, is still uncertain. If a compromise is reached, it would allow Bangladesh to maintain its market share in an increasingly hostile trading environment. Otherwise, the impact on employment, investment, and social stability could be profound.

A verdict is expected by the end of the week.

This article was translated to English using an AI tool.

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