US Supreme Court ruling on Trump tariffs eases uncertainty for Bangladesh RMG sector
Although Trump has announced a new 10% global tariff under a different legal provision, its uniform application across countries effectively restores a more level playing field in the short term, compared to the differentiated reciprocal regime.
The ruling by the Supreme Court of the United States limiting President Donald Trump's use of emergency powers to impose sweeping tariffs should modestly ease policy uncertainty for Bangladesh's apparel exporters.
Bangladesh had been subject to a 19% "reciprocal" tariff under the recent US-Bangladesh trade arrangement, so the invalidation of those IEEPA-based duties reduces the risk of sudden, across-the-board tariff hikes imposed under emergency authority.
For Bangladesh's garment sector - highly dependent on the US market - predictability is almost as important as the tariff rate itself.
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Although Trump has announced a new 10% global tariff under a different legal provision, its uniform application across countries effectively restores a more level playing field in the short term, compared to the differentiated reciprocal regime.
In terms of immediate order flows, I would not expect a sharp spike right away. US buyers typically place apparel orders months in advance, and sourcing strategies are shaped by longer-term considerations related to cost, compliance, and logistics.
However, the court decision could improve buyer sentiment by reducing legal uncertainty and the prospect of retroactive duties. Some American retailers may briefly pause to assess the evolving policy environment, especially given Trump's signal that he intends to pursue tariffs under alternative legal authorities.
If the new 10% tariff proves more stable and predictable than the earlier emergency-based regime, it could gradually support steadier order volumes from US importers.
However, I am concerned that a new set of restrictive trade measures from the US administration may be forthcoming, which could continue to disrupt the global trading system.
In this context, the hastily concluded trade agreement between Bangladesh and the United States - signed by the interim government just days before the national election - is already being questioned. Under this agreement, Bangladesh's interests appear to be significantly underrepresented. Moreover, the future of the agreement remains uncertain in light of the evolving legal and policy landscape.
On competitiveness, Bangladesh could see a relative advantage if higher country-specific tariffs on major competitors - particularly China - remain constrained or face legal scrutiny.
If the tariff gap between Bangladesh and higher-cost suppliers widens or becomes more predictable, US brands may accelerate diversification toward Bangladeshi factories.
However, competitiveness will still hinge on productivity, lead times, compliance standards, and infrastructure - not just tariffs.
In the bigger picture, the ruling reinforces constitutional limits on executive trade authority, which may lead to more congressional involvement in future tariff decisions.
For Bangladesh, a more rules-based US trade environment would likely be preferable to abrupt, executive-driven shifts.
Dr Selim Raihan is the executive director of the South Asian Network on Economic Modelling (Sanem).
