Export vulnerability demands immediate attention

The export trend in the US market for Bangladesh is now facing vulnerability due to the recent legal developments in the United States regarding the reciprocal tariff issue. Following the Supreme Court ruling on earlier tariff measures, the USA has restructured its reciprocal tariff framework, under which a 19 per cent tariff rate has been set for Bangladesh under the Agreement on Reciprocal Trade (ART). This parity is a positive factor for Bangladesh, as it ensures a stable and predictable tariff regime in the USA market.
However, since similar tariff rates are being applied to several peer competitor countries, Bangladesh's relative competitive advantage may not be significantly higher; therefore, the overall export outlook remains sensitive to further policy shifts.
US buyers are now demanding a 2 per cent cut in the ongoing prices, which is contributing to a declining profit margin trend for Bangladeshi exporters. As a result, some orders may even result in opportunity losses under the present circumstances.
This situation does not indicate a favourable trajectory for the country's export future. Besides, the RMG sector will have to incur significant expenditure during the upcoming two Eids for the payment of overtime wages and bonuses.
The USA is the second-largest market for Bangladesh, with approximately USD 8 billion in annual exports. So, it is highly necessary to review the pact with the USA, urging favorable conditions for Bangladesh, since after the ruling by the Court, the parity has been weakened, providing extra privileges to Bangladesh. Else, the reciprocal tariff for Bangladesh should be significantly reduced immediately.
Besides, exploring alternative markets and ensuring export diversification are mandatory to uplift export figures in the future. Many RMG factories are struggling with the burden of bank borrowing, and many are surviving only with policy support. In this situation, policymakers should consider the matter with due seriousness and adopt policies to strengthen the market with favorable gains.
Kawaik Azad Pronoy
A Banker