US tariffs push down Bangladesh apparel prices 2.26% in seven months

The average price of Bangladesh's apparel exports to the United States fell 2.26% year-on-year in the first seven months of 2026, as exporters faced part of the additional tariff burden imposed by the Trump administration.

The decline in unit prices came alongside a 6.50% fall in Bangladesh's apparel export value to the US during the same period (January-July), while shipment volume dropped 4.34%, according to data from the US Office of Textiles and Apparel, cited by Bangladesh Apparel Voice (BAV), an independent intelligence hub for Bangladesh apparel, delivers data-driven reporting and advisory on trade, ESG and innovation to global brands, media and policymakers.

Highlights: TBS

The figures indicate that export prices declined faster than shipment volumes during the period, putting further pressure on manufacturers already facing rising production costs.

Exporters attributed the price decline mainly to the US reciprocal tariff regime.

"Exporters had to face part of the reciprocal tariff burden. As a result, we had to reduce apparel prices to some extent, which affected unit prices," Shovon Islam, managing director of Sparrow Group, told TBS yesterday.

Before the reciprocal tariffs were introduced, Bangladeshi apparel products entering the US market faced a most-favoured-nation tariff of more than 15%.

The US administration imposed an additional 10% reciprocal tariff in April 2025, which was later raised to 20%. Although a US court subsequently struck down the reciprocal tariffs, the Trump administration imposed a 10% tariff.

During the period covered by the latest data, Bangladeshi exporters faced a 20% reciprocal tariff from January to March and a 10% tariff from April to June.

Exporters said they did not all bear the additional tariff burden equally. In some cases, buyers and exporters shared the cost, with exporters absorbing roughly one-third of the additional tariff and, in some cases, up to half.

As a result, many exporters were forced to offer lower prices to retain orders, further squeezing their margins.

Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association, said the situation has become increasingly difficult as production costs continue rising while export prices fall.

"Production costs are rising continuously, but instead of increasing, product prices have declined," he said, adding that some entrepreneurs have accepted orders at a loss simply to keep their businesses running.

He said factories are also struggling with electricity and gas shortages and have had to use diesel at three to four times the normal cost to maintain production, while buyers are offering lower prices.

Hatem warned that more factories could shut down unless the situation improves.

However, exporters are now seeing signs of improvement.

Shovon Islam said the pressure to face the tariff burden has eased, while US buyers are no longer demanding discounts in the same way.

"We are no longer being asked by US buyers to provide discounts," he said, expressing hope that exporters will receive better prices in the coming months.

He also said orders are increasing, raising expectations that Bangladesh's overall apparel exports to the US will recover in the coming months.