Bangladesh caught in US overcapacity probe

The United States has launched a fresh trade investigation into Bangladesh and 15 other economies to examine whether their policies and production practices are contributing to global overcapacity that could harm American manufacturing.

The probe was initiated on Wednesday by the Office of the United States Trade Representative (USTR) under Section 301 of the Trade Act of 1974, a powerful trade enforcement mechanism used by Washington to challenge what it considers unfair foreign trade practices.

The investigation will determine whether the acts, policies and practices in these economies are “unreasonable or discriminatory” and whether they burden or restrict US commerce.

According to a statement issued by the USTR, the countries under investigation include Bangladesh, China, the European Union, Singapore, Switzerland, Norway, Indonesia, Malaysia, Cambodia, Thailand, South Korea, Vietnam, Taiwan, Mexico, Japan and India.

The USTR said the move is part of efforts to re-shore supply chains and strengthen domestic manufacturing in the United States.

“The United States will no longer sacrifice its industrial base to other countries that may be exporting their problems with excess capacity and production to us,” USTR Ambassador Jamieson Greer said.

He added that the investigations underscore President Donald Trump’s commitment to rebuilding critical supply chains and creating well-paid jobs for American workers across manufacturing sectors.

According to the USTR, the Trump administration’s reindustrialisation efforts continue to face challenges due to structural excess capacity in several foreign economies.

“Across numerous sectors, many US trading partners are producing more goods than they can consume domestically,” the statement said.

Regarding Bangladesh, the USTR noted that the country has a bilateral goods trade surplus of $6.15 billion with the United States, largely driven by exports from the textiles sector.

It also pointed out that the Bangladeshi government provides cash incentives for exports in 43 sectors, including textiles and leather goods.

The statement further cited Bangladesh’s cement industry, which it said is facing significant excess capacity amid a sharp downturn.

National cement consumption fell to 38 million tonnes in 2024—less than 40 per cent of total capacity—and is expected to decline further in 2025.

Meanwhile, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has expressed concern over the country’s inclusion in the probe.

BGMEA President Mahmud Hasan Khan said the inclusion of Bangladesh in the list of investigated countries was “uncomfortable” and lacked clear justification.

After reviewing the USTR notice, Khan said the investigation appears aimed at examining whether countries are engaged in unfair practices such as labour rights violations, excessive export incentives, intellectual property breaches or other trade distortions.

“If such allegations are proven, the United States may impose additional tariffs,” he said.

However, Khan said Bangladesh is unlikely to face major difficulties. “Intellectual property issues in manufacturing are still limited in Bangladesh and the market for US-branded products is relatively small.

Labour rights concerns have largely been addressed, and export incentives are minimal,” he said.

He added that agricultural subsidies could also be scrutinised, though the United States itself provides extensive farm subsidies.

Khan suggested the investigation may reflect an effort by Washington to protect domestic industries, noting that the United States remains the world’s largest consumer market.

“Our major exports to the US are ready-made garments, and these are products that American manufacturers generally do not produce,” he said.

Nevertheless, Khan advised the government to prepare in advance to respond effectively to the investigation.

According to the USTR, a public docket for comments will open on March 17, 2026, while interested parties must submit written comments, requests to appear at the hearing and summaries of testimony by April 15.

The USTR is scheduled to hold a hearing on May 5 as part of the investigation process.