Dhaka: At a landmark event for Bangladesh economy, after the US revived tariffs on Bangladeshi goods, the Bangladeshi ready-made garments industry is under pressure. The tariff structure raised duty on exported goods from Bangladesh from 15% to 37%, which will presumably result in a higher pricing regime in the US market, making Bangladeshi garments less competitive.
The USA remains one of the most lucrative markets for Bangladeshi ready-made garments, with an almost 8.4-billion-dollar export yearly. This tariff increase could lead to grave consequences for the garment economy, and the economists and industry leaders are worried that higher tariffs would move US buyers away from Bangladesh to alternate sources, hurting the export earnings of this most important sector.
In support of this move, Bangladesh's competitors in this sector, such as India, China, and Vietnam, have been up against these tariff increases, with India enjoying minimums. On the other hand, the key challenge for the garment industry of Bangladesh is that exports are increasingly becoming expensive, thus adversely affecting its long-term market share in the US.
Experts want Bangladesh to move quickly to open talks with the US for tariff cuts, but at the same time stress the need for diversifying its export markets in order to lessen its dependence on the US. Former BGMEA director Mohiuddin Rubel backs both diplomatic negotiations and retaliation through tariffs for enhancing Bangladesh's bargaining power.
With forex cost rising and the competitive situation changing, Bangladesh must revise its approach to protecting its garment industry based on the grounds of quality and sustainable trade relations.
[Source Credit: Dhaka Tribune]
