On August 1, 2025, the U.S. imposed a steep 35% punitive tariff on Bangladeshi exports, pushing total duties above 50% and shaking our $47 billion RMG sector—especially woven garments that depend on up to 70% imported Chinese fabric. A new 40% local value-addition rule has further exposed structural gaps, though knitwear, with its strong domestic supply chain, remains more resilient.
Thanks to swift diplomatic engagement, tariffs have now been reduced to 20%, with talks for further cuts underway. This is welcome relief, but the breathing room is temporary. While Bangladesh is gaining from diverted orders as China and India face even higher tariffs, U.S. inflation and cautious buyer sentiment could erode these gains.
The challenge is clear: invest in backward linkages, expand man-made fiber production, diversify sourcing to meet origin rules, and modernize logistics. Most importantly, we must protect the
livelihoods of millions of workers who power this industry.
Knitwear’s resilience offers a roadmap; woven must adapt fast. This is more than a trade dispute—it’s a wake-up call to strengthen our value chain and position Bangladesh as a trusted,high-value partner in the evolving global apparel market.
