US Imposes 35% Tariff on Bangladeshi Goods, Threatening Export Economy

The United States will impose a 35% tariff on all Bangladeshi goods starting August 1, 2025, a slight reduction from an initially announced 37%, but still significantly higher than tariffs on regional competitors like Vietnam, which secured a 20% rate and Sri Lanka, which is at 30%. This move follows a 90-day negotiation window that ended on July 9 without a breakthrough.

The tariff applies broadly to all product categories, including the vital garment sector, which accounts for 81% of Bangladesh’s exports. The new duties also target goods rerouted through third countries to prevent circumvention. US President Donald Trump justified the tariffs by citing persistent trade imbalances and tariff barriers in Bangladesh.

Bangladesh’s garment industry faces a severe challenge, as the higher tariffs threaten to reduce competitiveness against countries like Vietnam, India, and China, which have lower or yet-to-be-finalized tariff rates. Experts warn the tariffs could cost Bangladesh’s apparel sector up to $2 billion in lost exports this year, risking massive job losses, especially among women workers.

In response, Bangladesh has launched a diplomatic effort with a delegation led by Commerce Adviser Sheikh Uddin in Washington, aiming to negotiate tariff reductions. Bangladesh has offered concessions, including increased imports of US goods such as wheat, cotton, LNG, and law enforcement equipment, to help narrow the trade deficit.

Despite initial talks showing consensus on many points, uncertainty remains high. The government hopes for preferential treatment as a Least Developed Country (LDC), which could lower tariffs closer to 10%. However, the final outcome depends on ongoing negotiations and broader US trade policies.

The tariff imposition comes amid other challenges like energy shortages and trade disputes with India, creating a “perfect storm” for Bangladesh’s export-driven economy. The garment sector, employing millions, fears order cancellations and factory closures, with workers expressing anxiety over job security.

The US tariff decision marks a critical juncture for Bangladesh’s trade relations and economic stability, with the government and industry stakeholders closely monitoring developments ahead of the August 1 deadline.

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