Staff Reporter :
The effective tariff rate on Bangladeshi garment exports to the United States has risen to 36.5 per cent, comprising a newly introduced 20 per cent reciprocal tariff in addition to the existing 16.5 per cent Most Favoured Nation (MFN) duty, according to Mahmud Hasan Khan, President of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
Addressing a press conference at the BGMEA headquarters on Saturday, Khan acknowledged that the added tariff poses further pressure on exporters. However, he highlighted a built-in provision allowing for partial tariff relief, contingent upon the sourcing of raw materials
from the United States.
“Exporters will be eligible for a proportional rebate if at least 20 per cent of the raw materials-such as cotton – are of US origin,” Khan said. The tariff reduction will be calculated based on the value of these materials in the final product.
This clause presents an opportunity for Bangladesh’s ready-made garments (RMG) sector, particularly in cotton-based apparel, which accounts for approximately 75 per cent of the country’s garment exports. Capitalising on this provision could help ease some of the cost burden arising from the revised tariff structure.
Nevertheless, the success of this strategy depends on strengthening trade links with US raw material suppliers, particularly in cotton. Khan urged both policymakers and exporters to explore long-term sourcing arrangements with American cotton producers and diversify sourcing strategies to qualify for duty relief.
He also called for strategic engagement with US trade bodies, proposing the development of a traceable and transparent supply chain that meets US origin requirements – essential for accessing tariff benefits under the new regime.
