BGMEA urges govt to continue tariff talks as US may consider further cuts for other nations

Highlights

• BGMEA urges continued negotiations with US.
• 20% duty waived if 20% materials are US-sourced.
• New tariffs raise production costs; SMEs need support.

Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Mahmud Hasan Khan has urged the government to continue negotiations with the United States, stating that some countries are still in talks with the Trump administration on trade or security deals that may result in even lower reciprocal tariffs for them.

Speaking at a press conference today (1 August) at the BGMEA office in Dhaka, he said, "There is no room for complacency. The latest US executive order clearly states that negotiations with some countries are ongoing.

"Once finalised, these countries could enjoy further tariff reductions. So, Bangladesh must stay engaged."

Thanking the US government for announcing a balanced tariff structure, Mahmud said, "For nearly four months, this issue has been a source of concern for us. Now that the additional duty on Bangladesh's exports has been revised down from 35% to 20%, we are on a more equal footing with key competitors — lower than China's 30% and India's 25%."

He praised the leadership of the interim government, especially the commerce and security advisers, for steering Bangladesh away from a potential crisis.

The BGMEA president noted that previously, Bangladesh paid 16.5% in Most Favoured Nation (MFN) tariffs. "With the new 20% additional duty, the total rate now stands at 36.5%, though it will vary by product."

He further said that around 75% of our exports to the US are cotton-based garments.

According to the Trump executive order, if at least 20% of the raw materials, such as American cotton, come from the United States, then the additional 20% duty will not be applicable on the value of those US-sourced materials.

"This creates an opportunity for partial duty exemptions through greater use of US raw materials," Mahmud said.

Still, he expressed concern about the impact of the 20% duty on production costs. "Our industries are already struggling with rising costs. The government must support especially small and medium factories, so they don't fall out of the market," he added.

The BGMEA chief also called for continued government policy support, improved efficiency at Chattogram Port, uninterrupted power and gas supply, and a more industry-friendly customs system.