New US tariffs are taken as the lesser of two evils as businesses appear to be in a bit feel-good mood for Bangladesh's comparative advantage over main rivals especially in apparel export to the American market.
Talking to The Financial Express immediate after the news went flying on Friday, Sparrow Group Managing Director Shovon Islam said the United States' decision to impose a 10-percent Section 301 tariff on Bangladesh and levy higher 12.5-percent duties on several major apparel-exporting competitors has largely preserved the country's competitive position on the US market despite an increasingly challenging global trade landscape.
"Although no additional tariff is welcome, the decision offers some relief for Bangladeshi exporters at a time when the industry is already under severe pressure from prolonged energy shortages, erratic gas and electricity supplies, rising production costs and extended manufacturing lead times," he said.
Despite these challenges, Bangladesh's apparel industry has continued to demonstrate resilience and remains a reliable and responsible sourcing destination for leading global brands, he added.
Mr Islam feels that the latest tariff decision reinforces the urgency of strengthening the sector's competitiveness through reliable energy supplies, higher productivity, greater value addition and sustained investment in sustainability, while continuing constructive engagement with the US administration to deepen bilateral trade and economic ties.
"The RMG sector now needs strong government support, particularly to ensure energy security and supportive financial policies, to weather one of the toughest periods in its history," said Mr Islam, a former BGMEA director.
Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) President Mohammad Hatem thinks Bangladesh's apparel exports are unlikely to face any additional pressure as long as tariff rates for competing supplier countries remain broadly unchanged.
"Demand in the US market weakened after the reciprocal tariffs were introduced last year. We had hoped demand would recover once those tariffs were lifted, but that is unlikely to happen anytime soon," he said.
Mr Hatem also described the tariff as "unfair and unjustified", saying that it was imposed over allegations that Bangladesh had failed to adequately enforce restrictions on goods produced with forced labour.
"After the USTR launched its investigation, the Ministry of Commerce consulted us. However, we were never informed about what transpired during the final hearing," he added.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Mahmud Hasan Khan said Bangladesh would remain competitive as long as its tariff burden did not exceed that of rival exporting countries.
"If our tariff rate is higher than that of our competitors, we will be at a disadvantage. Otherwise, there is little reason to worry," he said.
The BGMEA president notes that US buyers have continued to negotiate apparel prices as though the reciprocal tariffs were still in force, anticipating that similar duties could eventually be imposed through another trade mechanism.
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