Bangladesh eyes opportunity as Trump imposes high tariffs on Chinese goods

US President Donald Trump has been steadily increasing tariffs on Chinese goods in the American market. As of last Thursday, the US has imposed up to 145 per cent tariffs on Chinese products. In response, China has imposed 125 per cent retaliatory tariffs. This ongoing trade war between the US and China presents new opportunities for Bangladesh and other competing countries.

According to Bangladeshi economists and exporters, Chinese products will lose their competitive edge in the US market due to the high tariffs. As a result, American buyers are expected to shift their orders away from China, along with a significant volume of investment. To attract this shifting business, both local and foreign investment in Bangladesh will be required. Additionally, the government must take swift and effective steps to improve the ease of doing business.

President Trump has imposed a minimum 10 per cent reciprocal tariffs on products from various countries to reduce the US trade deficit. In total, products from 57 countries now face increased tariffs. Although Trump announced a 90-day suspension of retaliatory tariffs last Wednesday, the minimum 10 per cent tariff remains in effect for all countries. Meanwhile, the US–China trade war continues to escalate. It began on 2 April with a 34 per cent tariff on Chinese goods, which has since increased to 145 per cent as of last Thursday. In retaliation, China now imposes 125 per cent tariffs on American goods.

According to the World Trade Organization (WTO), this ongoing trade war could reduce bilateral trade between the US and China by up to 80 per cent, which accounts for 3 per cent of global trade. WTO Director-General Ngozi Okonjo-Iweala warned that the trade war could severely damage the global economy.

According to the US Census Bureau, in 2024, bilateral trade between China and the US totaled $582.4 billion, of which $438.9 billion were Chinese exports to the US, and $143.5 billion were American exports to China.
By contrast with China, Bangladesh’s trade volume with the US is relatively small. In 2024, bilateral trade was $10.6 billion, with Bangladesh exporting $8.4 billion worth of goods to the US and importing $2.2 billion.

Speaking to Prothom Alo, MA Razzaque, chairman of the private research organisation Research and Policy Integration for Development (RAPID), said, “The trade war between the United States and China will create instability in the global market. In the short term, this may lead to a decline in product demand. However, in the medium and long term, a golden opportunity awaits Bangladesh, as both business and investment are expected to shift away from China. No matter how much China negotiates in the coming days, the additional tariffs in the US market will not be eliminated."

China is currently the top exporter of ready-made garments to the US, followed by Vietnam, Bangladesh, India, and Indonesia. The US is Bangladesh’s largest single export market, with 87 per cent of Bangladesh’s exports to the US being garments.

Under the Trump administration, a 37 per cent retaliatory tariff was previously imposed on Bangladeshi goods, raising the total tariff to 52 per cent. With the suspension of retaliatory tariffs, for the next three months the tariff will be reduced to a minimum of 10 per cent, making the average effective tariff about 25 per cent. In comparison, Chinese goods are now facing 145 per cent tariffs.

Because of these high tariffs, US buyers began canceling or suspending orders for Chinese-made garments, leather goods, and other products. Now, those orders are returning, and buyers have started inquiring about placing new orders in other countries.

On Thursday, Shovon Islam, Managing Director of Sparrow Group of Industries, told Prothom Alo: "We’ve received several emails from buyers looking to shift their orders away from China. At this tariff rate, US brands simply can’t afford to import apparel from China."

Exporters say that following the imposition of high tariffs, US buyer companies have started suspending orders for Chinese-made garments. Some companies are even canceling shipments that are currently en route from China by sea.

Team Group managing director and BGMEA former vice president Abdullah Hil Rakib considers the high tariffs on Chinese goods a major opportunity for Bangladesh.

He said, “Other competing countries will also try to take China’s business. But we have additional production capacity that many of them don’t. If we execute properly, the next 10 years could be full of potential.”

He added that Chinese exporters are now targeting the European Union (EU) market and offering lower prices due to heavy government subsidies. This could increase competition for Bangladeshi firms focused on the EU.

Analysis of data from UN Comtrade, China Customs, and the US International Trade Commission (USITC) shows that the top US imports from China include: electronics, home appliances, apparel, medical supplies, wood products, construction equipment, electrical machinery, batteries, chemicals, processed agricultural goods, transport equipment and semiconductors.

According to the Bangladesh National Board of Revenue (NBR), the top exports from Bangladesh to the US in fiscal year 2023–24 were: ready-made garments, caps, leather shoes, home textiles, wigs and leather products.

When asked about the matter, Sharif Zahir, managing director of Ananta Group, one of Bangladesh’s leading garment exporters, told Prothom Alo: “Orders for high-end apparel previously exported from China are shifting. We must invest in building capacity for such products. Investments will also shift from China, and a portion of that can come to Bangladesh. But to secure those investments, we should prioritise specialised garments, synthetic fibers, electronics, footwear, and toys. Above all, we must actively engage with the US administration to ensure Bangladesh is exempt from retaliatory tariffs.”