Bangladesh Could Lose $1.25 Billion in US Exports as Tariffs Bite

Bangladesh’s apparel-driven export sector faces a major setback after a new 20 percent reciprocal tariff imposed by the United States is projected to shave off as much as 14 percent around $1.25 billion in shipments over the next year. That staggering figure comes from a recent study by the Research and Policy Integration for Development (RAPID) think tank, presented yesterday in Dhaka.

RAPID Chairman Mohammad Abdur Razzaque told journalists at the CIRDAP workshop on US tariffs and LDC graduation that apparel alone accounts for $1.08 billion of the anticipated loss. “When US apparel imports shrink by $10 billion overall, even a relatively lower tariff for Bangladesh will translate into severe headwinds,” he warned.

Despite facing lower duties than competitors such as India and China, Razzaque cautioned that Bangladesh’s overall export basket will still suffer from a contracting market. “Gaining share in a shrinking pie doesn’t guarantee higher revenues,” he said.

The study also forecasts sharper declines for other major exporters: China could see a 58 percent drop in its US exports, India 48 percent, Vietnam 28 percent, and Indonesia 27 percent. Razzaque added that if India successfully negotiates a 20 percent reduction in its tariff rate, Bangladesh’s export losses could deepen to 17.46 percent, even as India’s impact eases to about 18.33 percent.

The United States remains Bangladesh’s top destination, importing over $8 billion in goods annually more than 90 percent of which are garments against a $2 billion value of local purchases, creating a $6 billion trade gap. Globally, Bangladesh ranks third in supplying apparel to the US, holding a 9.3 percent share of the $81 billion American market.

Looking ahead, Razzaque pointed to variables such as US inflation trends, possible shifts in Washington’s trade policy, evolving global sourcing strategies, and Bangladesh’s own adaptability as critical to determining the long-term fallout. He also flagged intensified competition in other markets, including the European Union, which could drive down prices and further squeeze export margins.