Bangladesh sees relative 'advantage' even as US slaps fresh 10% tariff

Major apparel rivals will face tariffs of up to 12.5 percent, the government says

The Bangladesh government has said it remains in a relatively advantageous position even after the United States imposed an additional 10 percent tariff over the use of goods produced through “forced labour”.

Dhaka is treating the 2.5-percentage-point gap between its rate and that facing its main competitors in the garment sector, the country's leading export industry, as a major advantage.

The Ministry of Foreign Affairs issued the response in a statement on Friday, after Washington announced the new tariff on Thursday.

The ministry said while Bangladesh faces a 10 percent tariff, other major global apparel-manufacturing competitors such as China, Vietnam and Thailand will face rates as high as 12.5 percent.

This specific gap “further strengthens Bangladesh's ongoing comparative advantage over its higher-tariff competitors in the US market”, it added.

The ministry said the Office of the United States Trade Representative (USTR) is considering a three-year Tariff-Rate Quota (TRQ) for Bangladesh, Cambodia, Indonesia and Malaysia that would waive tariffs on goods made from US cotton and textile inputs.

If implemented, it said, the measure would give Bangladesh a further competitive advantage and help expand exports to the US.

The Trump administration imposed new import duties of 10 to 12.5 percent on 60 trading partners after accusing them of failing to curb the use of forced labour in production.

The move followed a USTR investigation into the use of the process.

The duties took effect after midnight Washington time on Jul 23, replacing a temporary 10 percent global tariff imposed earlier under the same law.

The new levy comes on top of an existing 18 percent duty under reciprocal trade arrangements.

For Bangladesh, the ministry said, the 10 percent tariff will apply to all exported goods in addition to the country's existing Most Favoured Nation rate.

It added that Bangladesh is among 17 of the 86 countries placed in the lowest 10 percent tariff tier.

The ministry said the government remains "fully committed to upholding international labor standards and will continue to engage closely with international partners to ensure the robust growth, compliance, and sustainability of critical export sectors".