On July 7, 2025, the United States announced a reduction in tariffs on Bangladeshi imports from 37% to 35%, effective August 1, offering limited relief to Bangladesh’s export-driven economy. The decision follows intense negotiations between Dhaka and the U.S. Trade Representative’s office, with Bangladesh pushing for a rate of 20% or lower, similar to Vietnam’s recent 20% tariff deal. The U.S. is Bangladesh’s largest export market, with garments accounting for over 95% of its $8 billion annual shipments.
Despite the slight reduction, the 35% tariff—coupled with an existing 16% duty—poses challenges for Bangladesh’s garment industry, a key economic driver. Dhaka offered zero-duty access for U.S. products like LNG and cotton to secure better terms, but negotiations stalled over U.S. demands for regional value addition and alignment with American sanctions policies. A Bangladeshi delegation, led by Commerce Adviser Sk Bashir Uddin, continues talks in Washington, aiming for a trade agreement by the August deadline.
The tariff hike could strain Bangladesh’s economy, which grew 4.86% in Q3 FY25, and disrupt its competitive edge against rivals like Vietnam. Industry leaders warn of potential job losses in the ready-made garment sector if a more favorable deal isn’t reached.
Published in SouthAsianDesk, July 8th, 2025
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