Fresh 10pc US tariff on BD exports

The United States has imposed a new 10 per cent tariff on imports from Bangladesh under Section 301 of the Trade Act of 1974 following an investigation into the enforcement of restrictions on goods allegedly produced with forced labour. However, the Bangladesh government believes the country's export competitiveness will remain intact as key rival exporters will face equal or higher tariff rates.

The Office of the United States Trade Representative (USTR) announced the decision after completing its investigation into 60 economies representing 86 countries. The new tariff took effect at 12:01 a.m. Washington time on July 24, replacing the temporary global 10 percent tariff that had been imposed under Section 122 of the Trade Act.

Under the new measure, all goods exported from Bangladesh to the US will be subject to an additional 10 percent tariff on top of the existing Most Favoured Nation (MFN) duty. As Bangladeshi products currently face an average MFN tariff of around 15 percent, the effective tariff on many products will stand at approximately 25 percent.

However, exporters said the overall tariff burden remains unchanged. They noted that the Trump administration had already imposed a temporary 10 percent tariff under Section 122 in February, and the new Section 301 tariff simply replaces that measure following the expiry of its statutory 150-day period.

According to the USTR decision, only 17 of the 86 countries covered by the measure will face the minimum 10 percent tariff. Bangladesh is among those countries, alongside India, Cambodia, Indonesia, Malaysia, Pakistan, Mexico, Canada, the United Kingdom and Sri Lanka.

Meanwhile, China's exports, along with those from Vietnam, Thailand, Turkey, Brazil, Egypt and several other countries, will be subject to a 12.5 percent tariff. The European Union, Japan, South Korea, Taiwan and Switzerland will also face tariffs ranging from 10 to 12.5 percent.

Since Bangladesh's principal competitors in the US apparel market-including China, Vietnam and Thailand-are subject to higher tariffs, the government believes Bangladesh's relative competitive position will be strengthened.

In a statement issued on Friday, the Ministry of Foreign Affairs said the new tariff structure places Bangladesh among the countries facing the lowest additional duty, helping preserve and potentially strengthen the country's competitiveness in the US market.

The ministry also said the USTR is considering introducing a three-year Tariff Rate Quota (TRQ) programme for Bangladesh, Cambodia, Indonesia and Malaysia. If approved, products manufactured using US-origin cotton and textile inputs could receive exemptions from the additional Section 301 tariff.

Such a mechanism would further enhance Bangladesh's competitiveness and support increased exports to the US market, the statement added.

The government reiterated its commitment to upholding international labour standards and said it would continue working closely with international partners to strengthen compliance, improve competitiveness and ensure sustainable growth of the country's export sectors.

BKMEA President Mohammad Hatem said the latest measure would not significantly affect Bangladesh's exports, as competing countries are facing similar or higher tariff rates.

"Our expectation was that demand in the US market would recover once the additional tariffs were removed. That possibility has now been delayed," he said.

Hatem also described the tariff imposed over alleged shortcomings in enforcing forced labour restrictions as "unfair and unreasonable." He said the Commerce Ministry had consulted industry representatives during the USTR investigation but had not disclosed the outcome of the hearings.

BGMEA President Mahmud Hasan Khan said Bangladesh would remain in a favourable position as long as its overall tariff rate did not exceed those of competing countries.

"US buyers had already been negotiating prices assuming that an additional tariff would eventually remain in place, regardless of the legal mechanism," he said.

Despite the government's positive assessment, exporters remain concerned about another ongoing USTR investigation into industrial overcapacity.

The USTR is examining whether Bangladesh and several other countries maintain excessive production capacity in certain sectors. In Bangladesh's case, the investigation focuses primarily on the readymade garment and cement industries.

Industry representatives said the hearings have already concluded and the investigation report is expected soon. Any additional trade measures resulting from that probe could create fresh challenges for Bangladesh's exports.

The United States continues to be Bangladesh's single largest export destination.

Bangladesh exported goods worth US$9.04 billion to the US during fiscal year 2025-26, up 4 percent from US$8.69 billion in the previous fiscal year.

The continued growth in exports despite the additional tariffs suggests that Bangladesh's export sector has remained resilient, although businesses say future developments in US trade policy will be crucial for maintaining that momentum.