[🇧🇩] Trump's Victory/Tariff/ Bangladesh

[Saif]

Commerce Advisor Sk Bashir proved his mettle: Energy Adviser

Commerce Advisor Sk Bashir Uddin proved his mettle over successful US tariff negotiations, Energy Adviser Fouzul Kabir Khan said on Friday.

en.prothomalo.com

Commerce Advisor Sk Bashir proved his mettle: Energy Adviser
Staff Correspondent Dhaka
Updated: 01 Aug 2025, 18: 12

Advisers Muhammad Fouzul Kabir (L) and Sk Bashiruddin

Commerce Advisor Sk Bashir Uddin has proved his mettle over successful tariff negotiations with the US, Adviser to the Ministry of Power Energy and Mineral Resources Muhammad Fouzul Kabir Khan said on Friday.

In a Facebook post of Friday afternoon, Fouzul Kabir said, “From domestic price stability to successful tariff negotiations with the US, he (Sk Bashir Unddin) has proved his mettle, to the dismay of naysayers.”

He called Sk Bashir Uddin as ”our extraordinary Commerce Advisor.”

Fouzul Kabir said, “I was tasked by the CA (Chief Adviser) to meet Sheikh Bashiruddin, among others, for the possible position of Commerce Advisor. I caught him on phone in Bhola, where he was on a business trip. We met at my office at the Ministry of Power Energy and Mineral Resources.

“Without any previous acquaintance, we chatted for an hour. He politely declined the snacks my office offered him! What I liked about him is his patriotism, no-nonsense stubbornness, and clarity in organizing a mass of facts for analysis. I conveyed my impressions about him to the CA. Thankfully, for our nation, the CA offered and he accepted the position,” he added.

“May Allah give him Hayate Taiyeba to serve the nation, be it in the public or private sector,” Fouzul Kabir concluded.

On 2 April, US President Donald Trump imposed reciprocal tariffs on countries from which the US imports goods. Fifty seven countries were slapped with increased tariffs at varying rates with Bangladesh facing an additional tariff of 37 per cent.

Muhammad Fouzul Kabir Khan

After a three-month suspension of this decision, President Trump informed the Chief Adviser of the interim government in a letter on 8 July that the reciprocal tariff for Bangladesh would be 35 per cent, effective from 1 August.

To reduce the reciprocal tariff imposed by the US administration, Commerce Advisor Sk Bashir Uddin led final negotiations in Washington with officials from the Office of the United States Trade Representative (USTR).

Finally, President Donald Trump issued an executive order on Thursday (US local time), imposing a 20 per cent reciprocal tariff on goods imported from Bangladesh. In the same order, he imposed reciprocal tariffs on several dozen other countries as well.​

 

[Saif]

Tariff cut by US strengthens Bangladesh’s global competitiveness: Bashir

Commerce Adviser Sk Bashir Uddin has said Bangladesh’s adjustment of its reciprocal tariff rate to 20 per cent on products exported to the United States (US) has strengthened its competitiveness in global trade. “We will be in a competitive position as the US has reduced tariffs on Bangladesh...

en.prothomalo.com

Tariff cut by US strengthens Bangladesh’s global competitiveness: Bashir
BSS Dhaka
Published: 01 Aug 2025, 16: 28

Commerce Adviser Sk Bashir Uddin BSS

Commerce Adviser Sk Bashir Uddin has said Bangladesh’s adjustment of its reciprocal tariff rate to 20 per cent on products exported to the United States (US) has strengthened its competitiveness in global trade.

“We will be in a competitive position as the US has reduced tariffs on Bangladesh to 20 per cent. So, there is no possibility that our exports to the US will be hampered. However, we expected it to be below 20 per cent,” he said.

The adviser said this in his immediate response securing a landmark trade deal with the United States.

Chief Adviser’s Press Secretary Shafiqul Alam pointed out this reaction in a post on his verified Facebook ID.

The US has reduced its tariff rate on goods from Bangladesh to 20 per cent, a significant reduction from the previous 35 per cent, after a final round of intense negotiations in Washington.

The announcement was made by the White House on Thursday (local time) after the final round of the talks in Washington DC between Bangladeshi officials and the Office of the United States Trade Representative (USTR), the main body responsible for overseeing US trade policy.​

 

[Saif]

US reciprocal tariff reduction encouraging, yet no room for complacency

The revised US reciprocal tariff on Bangladesh is now comparatively consistent with the competing countries, and that indicates reducing risk of trade diversion.

en.prothomalo.com

US reciprocal tariff reduction encouraging, yet no room for complacency
Selim Raihan
Published: 01 Aug 2025, 21: 56

Selim Raihan File photo

The reduction of the reciprocal tariffs, imposed by the US administration on the exports of Bangladeshi products to the country, from 35 per cent to 20 per cent is a positive and commendable step for the export sector of Bangladesh.

The revised tariff rate has come as the major restructure of US’ reciprocal tariff structures, and that seems to be applicable to many trade partners of the country. Sri Lanka, for example, has their tariff rate reduced from 30 per cent to 20 per cent, Pakistan from 29 per cent to 19 per cent, while Bangladesh’s competitors Vietnam and India currently have 20 and 25 per cent respectively.

In this context, the revised reciprocal tariff rate on Bangladeshi products in the US markets is now comparatively consistent with the competing countries, and that indicates reducing risk of trade diversion. It possibly lowers the risk of a major shock on the export of the readymade garment sector.

Since the modifying reciprocal tariff rate in China has not yet been finalised, an important uncertainty remains in the global trade perspective. What rate the US will set for China, and that will play the prime role in the global trade flow in future because of China’s important position in the global production system, as well as the country’s various overlapping similarities with various export sectors of Bangladesh.

If China sees an imposition of a higher tariff rate, demand may shift in favour of the South and Southeast Asian exporting countries including Bangladesh. On the other hand, if China gets favoured relatively, competition may intensify. So, the final decision on China will become important for the reconfiguration of the global trade flows and dynamics.

The reduction of the reciprocal tariff to 20 per cent has brought short-term relief. However, it also raises the question of what Bangladesh has offered the US in return. Some commitments, such as agreements to import wheat, cotton, and aircraft, have already been revealed.

However, it is reasonable to assume that more sensitive commitments may have been made under non-disclosure agreements, which are unlikely to be disclosed to the public in the near future. This situation clearly highlights the need for greater transparency, oversight, and long-term strategic planning in Bangladesh’s trade diplomacy.

This experience serves as an important lesson for Bangladesh. It underscores the need to build more stability and resilience in the country’s foreign trade structure. Three strategic priorities emerge clearly from this experience. First, Bangladesh must intensify efforts to diversify its export products and enter new markets. A narrow export structure, based on a limited range of products and reliant on a few destinations—especially the US—exposes Bangladesh’s economy to unnecessary risks.

Second, effective reforms in trade, taxation, and investment policies are needed to enhance competitiveness and attract long-term foreign investment. Improving the regulatory and business-friendly environment will help position Bangladesh as a more stable and attractive trade partner.

Third, Bangladesh should now explore targeted free trade agreements (FTA) with emerging economies in Asia, Africa, and Latin America. Such agreements could provide protection against future protectionist pressures and help establish alternative export pathways.

Therefore, while the reduction in the US reciprocal tariff rate is encouraging, it does not raise any option for self-complacency. Rather, it presents both an opportunity and a warning. Bangladesh must act decisively now to establish a diversified, competitive, and resilient trade strategy.

* Selim Raihan is executive director of South Asian Network on Economic Modeling (SANEM)​

 

[Saif]

Tariff cut brings relief as offers worry: economists

The United States has decided to reduce the reciprocal tariff on imported goods from Bangladesh to 20 per cent from the previously announced 35 per cent following a series of negotiations over the past month.

www.newagebd.net

Tariff cut brings relief as offers worry: economists
US reduces reciprocal tariff to 20 per cent
Saddam Hossain 01 August, 2025, 10:24

Bangladesh and US delegates hold third round of tariff talks in Washington. | CA press wing

The United States has decided to reduce the reciprocal tariff on imported goods from Bangladesh to 20 per cent from the previously announced 35 per cent following a series of negotiations over the past month.

However, economists said, despite bringing short-term relief, the decision raised questions about what Bangladesh might have offered to the US in return.

Due to the non-disclosure agreement, what was offered remains unknown except the plan to purchase Boeing aircraft and wheat.

According to a statement announced by the White House on Friday, US President Donald J Trump unveiled new tariff rates for 70 countries, including Bangladesh.

After the final round of the tariff talks between a Bangladesh delegation and US officials, the North American country declared the new tariff rate.

Regarding the reduction in reciprocal tariff rate, chief adviser Muhammad Yunus congratulated the Bangladesh tariff negotiators on securing a ‘landmark’ trade deal with the US, according to statement issued by the CA press wing.

The statement also said that by reducing the tariff to 20 per cent, the negotiators demonstrated remarkable strategic skill and unwavering commitment to safeguarding and advancing Bangladesh’s economic interests.

‘The agreement they negotiated preserves our comparative advantage, enhances our access to the world’s largest consumer market and safeguards our core national interests,’ the statement added.

The new tariffs came into effect on August 1, meaning Bangladeshi exporters would now pay an average of 15 per cent regular tariff along with an additional 20 per cent reciprocal tariff.

Earlier, on July 8, through a letter to the chief adviser, Washington imposed a 35 per cent reciprocal tariff, meaning the newly declared rate has been reduced by 15 percentage points.

Among the close competitors of Bangladeshi goods in global trade, the White House imposed tariff rates on Indian goods at 25 per cent, Pakistani goods at 19 per cent, Vietnamese goods at 20 per cent, Cambodian at 19 per cent, and Indonesian goods at 19 per cent.

Chinese and Mexican goods were not on the list.

The tariffs on Bangladesh neighbours Afghanistan are 15 per cent, Sri Lanka 20 per cent, and Myanmar 40 per cent, according to the Annex 1 list of the White House.

On the tariff negotiations, power and energy ministry adviser Muhammad Fouzul Kabir Khan praised commerce adviser Sk Bashir Uddin in a social media post.

He said that from domestic price stability to successful tariff negotiations with the US he had proved his mettle to the dismay of naysayers.

On April 2, US President Donald Trump announced steep tariffs on several countries, citing trade deficit concerns.

At that time, Bangladesh was subject to a 37 per cent tariff.

On April 9, Washington put on hold the tariffs for three months, giving countries an opportunity to negotiate, which ended on July 9.

Trump sent letters to country heads on July 8 setting new tariff rates and gave until 31 July to reach trade agreements with the US.

During this time, Bangladesh conducted a series of negotiations and agreed to purchase Boeing aircraft and wheat to cut the trade deficit with the US.

Regarding the tariff reduction, Professor Mustafizur Rahman, a distinguished fellow of the Centre for Policy Dialogue, said that the reduction in tariff rates brought some relief and diminished uncertainty.

‘However, concern persisted regarding what was offered against the tariff reductions. The matters must be evaluated through the clauses of the Non-Disclosure Agreement,’ he added.

Regarding the tariff reduction, Bangladesh also agreed to import more from the US along with intellectual property law implementation, custom waiver for US products, trade union rights, and others.

‘The tariff reduction must be evaluated through the gain and the offers,’ he added.

He also said that the tariff reduction might also create some challenges over the cost of the offering from Bangladesh, especially on buying LNG, aircraft, and other goods.

Moreover, it might reshape the import scenario from Bangladesh’s global trading partners, like Russia and China.

‘It also accelerated Bangladesh to do more works on intellectual property rights, trade union, and institutional reform,’ he added.

He further said that the reduction must bring relief for the country’s exporters as the rates declared were almost similar to the major competitors.

In 2024, Bangladesh exported to the US goods worth about $8.4 billion, of which $7.34 billion accounted for readymade garments. In the year, the country imported US goods worth $2.2 billion.

Against this backdrop, the US is pressing Bangladesh to lower the trade deficit to get a ‘favourable’ tariff rate.

With a view to reducing the trade deficit, Bangladesh on July 27 planned to purchase 25 Boeing aircraft.

Earlier, on July 20, Bangladesh signed a memorandum of understanding with the US to import seven lakh tonnes of wheat annually for the next five years to reduce the trade deficit with the US.

On July 23, the interim government decided to procure 2.20 lakh tonnes of wheat from the US at $302.75 a tonne.

Mohammad Abdur Razzaque, chair of Research and Policy Integration for Development, said that the 20 per cent US tariff on Bangladeshi exports was a relief in terms of maintaining parity with competitors.

However, he warned, the overall trade deal must be evaluated in light of the offers made by Bangladesh, many of which remain undisclosed.

‘Understanding the full scope of our obligations is essential to evaluate whether this outcome truly serves our long-term interests,’ he added.

Selim Raihan, executive director of the South Asian Network on Economic Modeling, said that the reduction in the US reciprocal tariff rate for Bangladesh was a welcome development for the country’s export sector.

However, it also raised questions about what Bangladesh’s offers to the US were.

‘Some of these commitments have been made public but it was reasonable to assume that more sensitive obligations may have been agreed upon under the NDA,’ he added.

He also said that the country needed to build greater resilience, including diversifying the export basket, domestic reforms in trade, taxation, and investment policies, and investment in the regulatory and business environment.

Economists also said that while the downward adjustment in the reciprocal tariff rate was encouraging, it should not lead to complacency.

Rather, it presents an opportunity, and a clear warning, for Bangladesh to take proactive steps toward building a more diversified, competitive, and resilient trade strategy.​

 

[Saif]

Partial tariff relief is a hard-won victory

Dhaka has proven it can meet this challenge, but the demands will not cease.

www.thedailystar.net

Partial tariff relief is a hard-won victory
A sober understanding of the new reality is necessary moving forward

VISUAL: STAR

In securing a 20 percent tariff rate from Washington, Dhaka has navigated a perilous new era of US trade diplomacy. The immediate reaction is justifiably one of relief. A potential 35 percent tariff, which would have been catastrophic for the country's primary export engine, has been averted. This is a hard-won victory for Bangladesh.

Yet, this relief should be tempered with a sober understanding of the new reality. While National Security Adviser Khalilur Rahman rightly praised the outcome as "good news," the more measured comments from Commerce Adviser Sk Bashir Uddin are equally telling. His admission that Bangladesh "expected a rate below 20 percent" reveals the fine print of modern transactional diplomacy: a win is not about achieving the ideal, but about securing a competitive position in a world of hard bargains. The new 20 percent benchmark, applied under the reciprocal trade framework, will stack atop the country's existing average tariff of 16 percent, pushing the total levy to 36 percent. While steep, the rate remains workable, precisely because it is not unique to Bangladesh. The same formula applies to all nations, ensuring the country stays competitive with key rivals.

Indeed, the outcome keeps Bangladesh in lockstep with Vietnam, Sri Lanka, and Indonesia, and only marginally behind Pakistan's 19 percent. The contrast comes from the fate of India. Hit with a punitive 25 percent tariff, New Delhi's experience demonstrates that in President Donald Trump's Washington, strategic partnership alone is no longer a shield. Access to the world's largest consumer market is now explicitly tied to a country's willingness to align with American priorities.

The price of this access is clear. Bangladesh's negotiators wisely focused their commitments on purchasing US agricultural products, a move that serves food security goals and fosters essential goodwill. That was an astute concession. It illustrates that successful negotiation is no longer confined to tariff percentages but requires a holistic approach, linking trade to everything from food policy to strategic cooperation.

Therefore, this episode must serve as more than a momentary success; it must be a blueprint for the future. The era of predictable, rules-based trade relations is giving way to a more fluid and demanding environment. The White House has declared that each country's tariff rate reflects the "depth of its commitment" to US interests. Dhaka has proven it can meet this challenge, but the demands will not cease. The government should be applauded for securing this initial victory, as a failure to do so would have disrupted exports to the country's single biggest market. But the key takeaway is that such negotiations are the new normal. Bangladesh must now institutionalise this capacity for agile, interest-based statecraft. The hard work of navigating this complex new world order, where every trade benefit comes with a cost, has only just begun.​

 

[Bilal9]

Defence Adviser Dr. Khalilur Rahman and Commerce Adviser Sheikh Bashir Uddin opines on Tariff wins for Bangladesh in DC, well spoken comments in Bengali. Happy to see well-qualified folks for a change in Bangladesh governance structure.

 

[Bilal9]

 

[Saif]

Deal information to be made public with US’ consent: Commerce Adviser

Commerce Adviser Sk Bashir Uddin has said the information in the trade agreement following the negotiations with the United States will be released after the agreement is signed, subject to the consent of the United States. “So, due to our rights to information (Right to Information Act- RTI

thefinancialexpress.com.bd

Deal information to be made public with US’ consent: Commerce Adviser

UNB
Published :
Aug 02, 2025 18:12
Updated :
Aug 02, 2025 18:12

Commerce Adviser Sk Bashir Uddin has said the information in the trade agreement following the negotiations with the United States will be released after the agreement is signed, subject to the consent of the United States.

“So, due to our rights to information (Right to Information Act- RTI), and based on the US’ consent, we will definitely disclose the agreement,” he said, adding that there will be a joint statement once the deal is signed.

The Commerce Adviser said it was to some extent unfortunate that the issue of the agreement was leaked. “You have seen, too. There is nothing against the country’s interest actually.”

He made the remarks during a conversation with Minister (Press) at the Bangladesh Embassy in Washington Golam Mortoza who shared it from his verified Facebook page for the media.

The Commerce Adviser said they have clearly come out from those issues which might go indirectly against the country’s interest and mainly they involved the private sector.

He said there is no alternative to increasing Bangladesh’s capacity if they want to implement the trade agreement. “At the same time, there is no room for complacency about this.”

“Its success or failure will depend on our capacity and competitiveness. To get fruits from this, we need to boost our capacity and competitiveness. I have heard that there is no room for complacency. I hundred percent agree on this. Under no circumstances, we have no room for complacency,” he added.

Asked about the purchase of 25 Boeing aircraft from the United States, Bashir said the United States did not raise the issue at all in the trade talks. “This issue is one-sided. Boeing made 12 aircraft last year. So according to this agreement, they may be able to deliver the first aircraft in 2037.”

The United States was interested in agricultural products. Bangladesh imports food products worth $ 15 to 20 billion and the US is also a large producer of agricultural products.

Bangladesh has mainly talked about reducing the trade deficit on the basis of energy and agricultural products, products that Bangladesh already has to import.

The Commerce Adviser said the trade deficit with Bangladesh is about $6 billion. Bangladesh can try to reduce the trade deficit of $2 billion by increasing the import of cotton, soybean, corn and wheat products.

He said this approach will help Bangladesh significantly to reduce the trade deficit. “Boeing aircraft are not a very important issue,” Bashir said, adding that “You don’t buy it every day but you buy soybean every day.”

The Adviser laid emphasis on boosting the operational capacity of the aircraft and the interim government is trying to do that.

Bangladesh’s national flag carrier Biman Bangladesh Airlines has the potential to transport an additional 10 million passengers, he said, adding that considering that, 25 aircraft are not much.

The Commerce Adviser dismissed the speculations of any secret deal with the United States in exchange for the reciprocal tariff reduction on Bangladeshi exports from 35 percent to 20 percent, saying all discussions prioritised the national interests.

“There is no room to ignore our own interests. Whatever we did, we did by prioritising our country—just as the US prioritises its national security,” the Adviser said.

He also noted that a Bangladeshi business delegation is currently in the USA, and “they will not do anything that goes against their own interests.”​

 

[Saif]

BD gets decent, though not a superb deal

Finally, the wait is over. The Office of US Trade Representative (USTR) -- actually President Donald Trump -- announced what tariffs will apply to which country as their goods enter the US market. A new world trade order has emerged. Trading according to comparative advantage of nations will no lon

thefinancialexpress.com.bd

BD gets decent, though not a superb deal

Zaidi Sattar
Published :
Aug 02, 2025 08:07
Updated :
Aug 02, 2025 08:07

Finally, the wait is over. The Office of US Trade Representative (USTR) -- actually President Donald Trump -- announced what tariffs will apply to which country as their goods enter the US market. A new world trade order has emerged. Trading according to comparative advantage of nations will no longer be the basis for export success in the US market, which happens to be the world's largest single country market and an attractive destination for exports of all countries. In the new world of trading with the United States, a relatively better bilateral trade deal is what matters. A bad deal (i.e. relatively higher import tariffs) could significantly undermine competitiveness.

So, after several tenacious sessions of negotiations with USTR, Bangladesh has been accorded a "decent" rate of 20% tariff on our exports reaching US shores. This compares with Sri Lanka's 20%, Pakistan's 19%, and India's 25%. Other notable ones in the 20% category (includes 19% ones) are Vietnam, Thailand, Malaysia, Indonesia, Philippines, and Cambodia. It is worth ruminating about what happened in our neighbourhood. Pakistan got a marginally sweeter deal with 19%, perhaps for the offer of exclusive rights for offshore oil exploration (by still unknown US oil company) off the coast of Southern Pakistan. India seems to have got a bad rap with the imposition of 25% tariffs, despite long negotiations for months, primarily because of its traditional resistance to open up its agriculture and dairy sector by lowering its 40% average tariffs in this sector. So, in relative terms, Bangladesh gets a decent though not a superb deal as a reward to the tenacious negotiations pursued by our official Team at the table. Whether or not it would have made a difference I have always argued that the nation might have been better served with the inclusion of a seasoned trade economist with a deeper understanding of the intricacies of domestic trade and tariff policies, which is not as simple as it might seem to the external world. Be that as it may, it is time to commend our negotiators for staying the course despite the uphill task they faced.

A brief summary of the notable features of the latest version of US reciprocal tariffs can be captured as follows (few countries not listed yet, may be due to negotiations not concluded yet):

• A baseline (minimum) tariff of 10% applies to UK and Falkland Islands;

• 15% tariff applies mostly to African countries, and few countries that have largely open economies or on particularly friendly terms with the USA (not necessarily allies); Turkey, S. Korea and New Zealand are other notables;

• 19-20% tariffs apply to countries that have shown eagerness to negotiate and offer as many zero-tariff concessions and offers to substantially raise imports from USA; 19% serves as a sweetener for countries that went the extra mile to appease USTR;

• 25-30% tariffs (India, South Africa) sound like punitive impositions for not reaching agreement, or some outstanding geopolitical issues;

• China-US trade negotiations remained inconclusive until now; so 30% previously imposed remain;

• Singapore, one of the most open economies is not named; my understanding is that there is an impasse with pharmaceutical tariffs;

• Quite a few countries are also missing in the list.

What could be a quick take away?

First, the baseline tariff of 10% was first imposed uniformly across all countries when President Trump first talked about launching reciprocal tariffs. To my mind, a theoretical case for this was made by the Council of Economic Advisers to enact a "tariff offset" for the perennial over-valuation of the US dollar (undermining competitiveness of US export products to start with).

Second, this a new world of differentiated tariffs for countries rather than products. This is contrary to the fundamental principle of rules-based trade (MFN principle) regarding equal treatment of all WTO member nations. If I understand it right, the other novelty is that a country is subject to one import tariff for all its exports to the USA. For Bangladesh, that means all its exports ranging from garments and footwear to ceramic tiles and handicrafts will be subject to the same tariff rate. Since 90% of our current exports are RMG, the focus has been on what tariffs will this be subject to versus the rate for competitors like India, Vietnam, and so on. But Footwear, toys, etc., two promising exports, will now be facing the 20% rate as well.

Third, there is also a punitive tariff for "transshipments"; i.e. for re-exporting goods that originate from another country, in order to ensure that the applied tariff is only meant for the country concerned. China or any other country subject to higher tariffs cannot take the advantage of shipping their goods via another country.

Finally, in relative terms, the 20% rate for Bangladesh gives our exporters some respite and a competitive landscape for entry to the US market. In the new world of reciprocal tariffs, there will be a lot of churning in the market with enormous redirection or trade diversion happening in the months ahead. The global world of trade is no longer the same. So our exporters need to gear up if they wish to carve out a bigger slice of the potential.

To sum up, as I understand it, the 20% rate shows that imports from Bangladesh will not be subject to punitive tariffs, under the present tariff scheme. Given the overall distribution of the new tariffs I consider 20% in the moderate range, though all the reciprocal tariffs could be considered punitive if compared to pre-Trump US tariffs which had an effective rate of 2-3% only and the US economy was among the most open economies in the world. Not any more.

(Dr. Zaidi Sattar is Founder Chairman, Policy Research Institute of Bangladesh.​

 

[Saif]

As Trump tariff tempest calms, US buyers begin activating trade

Apparel exporters and their US buyers are gathering wits for full-steam resumption of trade as the Trump tariff tempest calms with the United States deciding to settle on a pared-down 20-percent reciprocal tariff on Bangladeshi exports. Some of the buyers are already asking their suppliers to resu

thefinancialexpress.com.bd

As Trump tariff tempest calms, US buyers begin activating trade
Some already ask BD suppliers to resume production, shipment

Jasim Uddin
Published :
Aug 02, 2025 23:36
Updated :
Aug 02, 2025 23:36

Apparel exporters and their US buyers are gathering wits for full-steam resumption of trade as the Trump tariff tempest calms with the United States deciding to settle on a pared-down 20-percent reciprocal tariff on Bangladeshi exports.

Some of the buyers are already asking their suppliers to resume production and shipment which previously had made a pause amid uncertainty over the threatened 35-percent reciprocal tariff and breathtaking negotiations to scale the barrier, according to the industry-insiders.

Talking to The Financial Express, Shovon Islam, Managing Director of Sparrow Group, one of the leading US-focused exporters with annual exports of around $300 million-more than half to the US-said the tariff concerns had halted approximately US$5 million worth of orders, equivalent to 300,000 pieces of garments.

"But, after the tariff was reduced to 20 per cent, our buyers got back in touch and gave us the go-ahead," he said about the turnaround.

Nearly one and half a dozen iconic US buyers have not asked for halting their production or passed on the burden of the further tariff hike. "As I have discussion with many retailers, they are ready to increase their retail prices considering tariff and other costs, which may cause a reduction in apparel demand and result in lesser orders for next couple of months."

He adds: "Even with the new rate, they haven't asked for any cost-sharing-they absorbed the impact themselves."

Similarly, Asian Group, a leading apparel exporter based in Chattogram, with annual exports worth $340 million-93 per cent of which go to the US-has welcomed the breakthrough in negotiations.

"Two of our largest US buyers, Target and Walmart, did not halt their production or shipments during the uncertainty," says Khondaker Belayet Hossain, Executive Director of the corporate, Asian Group. "However, some buyers are still taking a wait-and-see approach since the deal has yet to be formally signed. It may take another two to three days before they make further decisions."

After the 10-percent tariff hike in April, a few buyers informally requested cost-sharing measures from suppliers. "They didn't ask directly, but in cases of delayed shipments, they sought up to a 3.9-percent discount-something that hadn't occurred before," Belayet notes.

Now that the reciprocal tariff has been fixed at 20 per cent, he anticipates that some buyers might again seek partial cost-sharing. "It really depends on the strength of the buyer-supplier relationship. When suppliers have leverage, buyers are more cautious," he says.

He also emphasizes the need for Bangladeshi manufacturers to reduce dependency on a single market like the US and focus on lowering production costs by at least 1.0 to 2.0 per cent. "Factories must invest in automation and adopt industrial engineering methods to reduce wastage and boost efficiency," suggests Mr Belayet, a former BGMEA director.

SM Majedur Rahim, Director of Giant Group, another major exporter with 70-percent capacity dedicated to the US market, echoes the sentiment.

"This reciprocal tariff rate brings immediate relief to both buyers and suppliers," he says. "It restores some competitiveness for Bangladeshi exporters."

He notes that while most buyers are on summer holidays, conversations are ongoing. "Buyers are now assessing how the new tariff-effective from 7 August-will affect final retail prices."

He warns that rising retail prices could suppress consumer demand in the US. "Next month's orders may see some slowdown. But Bangladesh is still in a relatively favourable position because we export basic, low-cost products."

Rakibul Alam Chowdhury, Chairman of RDM Group, which exports $65 million annually-70 per cent of which go to the US-informs that production for some previously halted orders has now resumed.

"Buyers who had paused production for goods scheduled to ship after 30 July have now asked us to restart," he told the FE. "We expect formal confirmation once US offices reopen fully on Monday."

Exporters are still uncertain about the 40-percent local-value -addition requirement tied to the tariff regime. "We don't know yet whether this clause applies. If it does, some factories will struggle, because achieving that level of local value addition isn't feasible for all products," Chowdhury added.

He urges manufacturers to build direct relationships with buyers instead of relying on buying houses. "To improve value addition, exporters must enhance their in-house merchandising capabilities," said Chowdhury, a former BGMEA vice president.

SM Khaled, Managing Director of Snowtex Group, another major exporter, says a large order from a US buyer had been on hold but is now expected to be confirmed within the next week.

"We haven't had formal communication yet, but the fear that the order might shift to another country is largely gone," he says, on a note of relief. "Now, the question is how much they will order, because prices will rise, and that could dampen consumption."

As Bangladesh faces 20-percent tariff-compared to Vietnam's as much, 20 per cent, and India's 25 per cent-its competitive standing has improved, but Mohammad Hatem, President of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), feels that exporters must stay alert.

"President Trump could revise tariffs on India or change Vietnam's trade status at any moment," he warns. "We must be proactive and not allow buyers to pass the entire tariff burden onto us. Tariffs have risen for everyone, and right now, Bangladesh has no direct substitutes."

Hatem also points out that China's declining export volume presents an opportunity. "Vietnam, due to its dependency on Chinese raw materials, could face challenges. With combined tariffs on Chinese-origin products reaching up to 64 per cent, many buyers will be looking for alternative sourcing options-and Bangladesh stands to gain."​