Bangladesh’s garment sector fears rivals despite US tariff cut
Firms from Bangladesh’s biggest export sector worry that they do not enjoy a major competitive advantage over rivals from Vietnam and India
The US this month reduced its tariff on Bangladesh’s garments to 20 per cent from an earlier proposed 35 per cent levy – a move seen as key to preserving the country’s competitive edge in its biggest export market.
Industry leaders and government officials have welcomed the decision, with interim Prime Minister Muhammad Yunus calling it a “decisive diplomatic victory”.
Even with the reduction, the levy on the country’s garment exports to the US amounts to 36.5 per cent, including a pre-existing 16.5 per cent tariff, according to Mahmud Hasan Khan, president of the Bangladesh Garment Manufacturers and Exporters Association.
“Yes, the new tariff will give some relief. At the same time, the overall tariffs will still be higher than before, which means our garments will become more expensive for US buyers,” said Abdul Wadud, whose company Winter Group exports knitwear and jumpers globally.