Despite the recent imposition of new tariffs, Bangladesh's apparel exports to the United States increased significantly in the first two months of 2025, as per a new report by OTEXA, an affiliate of the US Department of Commerce.
As per this report, the value of Bangladesh’s clothing exports to the US increased by 26.64 per cent to $1.5 billion worth during Jan-Feb’2025. The value of these exports remained particularly strong in January with a rise of 45.9 per cent.
However, this positive trend is now threatened by the US's new 37 per cent tariffs on Bangladeshi goods. Industry experts suggest, the rise in exports in early 2025 may have been due to importers rushing to secure shipments before the tariffs took effect.
In terms of volume, Bangladesh apparel exports to the United States increased by 23.38 per cent to 488.27 million sq m. This growth outpaced other major suppliers, including India, Pakistan, Vietnam, and China.
Exporters attribute this strong rebound to Bangladesh's competitive pricing, improved production capabilities, and commitment to sustainable practices. However, the new tariffs are expected to erode this competitiveness, potentially favoring countries like India and Pakistan, which face lower tariff rates.
Despite a record high of $9.73 billion in 2022, the share of Bangladesh's apparel export share in the US market declined to 9.26 per cent in 2024. The rise in exports from countries like Indonesia, India, Pakistan, and Cambodia indicates diversification of sourcing by US buyers.
Expressing concern over the impact of these new tariffs, industry figures predict a significant decline in Bangladesh's exports to the US, potentially losing ground to competitors like India, Pakistan, Jordan, Egypt, and Turkey.
Data shows, India's apparel exports to the US also increased, highlighting its growing competitiveness. Vietnam and China also registered growth, though at lower rates. Overall, U.S. apparel imports rose by 11.21 per cent.
Internal issues such as the energy crisis, high production costs, and high bank interest rates are hampering the competitiveness of Bangladesh’s apparel industry, say experts. They also fear a global trade war, which would harm all exporting countries.
Experts further note, tariffs may not cause a major shift in market competition, as other countries also face various tariff rates. However, they express concerns about the growing competition from India, which has a lower tariff rate.
