US reciprocal tariff: What will be the total duty on exports under new rate?

US president Donald Trump has reduced the reciprocal tariff on Bangladesh products to 20 per cent. A relevant White House order says the new reciprocal tariff will take effect from 7 August.

With the newly imposed reciprocal tariff, the total tariff on Bangladeshi exports to the United States has once again become a topic of discussion.

As per the figures of US-based International Trade Commission, US imported Bangladeshi products worth USD 8.44 billion in 2024. The USA government earned USD 1.27 billion from tariffs on these products.

Last year, the average tariff rate on Bangladeshi products was 15 per cent, which will increase to 35 per cent with the addition of a new 20 per cent reciprocal tariff.

However, the effective tariff rate will vary by product because the United States currently imposes different tariff rates on different imported products. In other words, the tariff rates differ from product to product.

The country has been collecting tariffs ranging from zero to 350 per cent depending on the product. This is now also changing with the introduction of the reciprocal tariff.

There are three types of tariff rates in the US tariff schedule. One of them is the MFN (most favoured nation) tariff rate. This rate applies to imports from countries with which the US has normal trade relations.

Generally, member countries of the World Trade Organization (WTO) receive this benefit. Bangladeshi products are subject to the MFN tariff rate.

The second is the reduced or zero tariff rate offered under trade agreements with countries that have trade deals with the United States or are providing trade preferences. This rate is usually lower than the MFN tariff rate.

The third is the tariff rate applicable to countries with which the United States does not have normal trade relations. This rate is generally higher.

According to data from the Budget Lab website of Yale University in the United States, the effective average tariff rate was 2.40 per cent on 20 January 2025.

However, this rate began to change rapidly due to a series of measures taken by Trump. By 1 June, it had risen to 15.60 per cent. The Budget Lab has indicated that the rate will exceed 20 per cent once the new tariffs come into effect.

Last year, Bangladesh’s apparel exports to the United States faced tariffs ranging from zero to a maximum of 32 per cent. However, the effective average tariff rate on apparel exports stood at 16.77 per cent.

With the addition of the new reciprocal tariff, the effective average tariff rate on Bangladeshi apparel products will rise to 36.77 per cent.

However, the apparel sector includes a wide range of products, so tariff rates will vary from item to item. According to the US tariff schedule, sweaters made from man-made fibres are subject to a 32 per cent tariff.

This rate applies to most countries, including Bangladesh. With the addition of the reciprocal tariff, the total duty on exporting these products will rise to 52 per cent.

On the other hand, sweaters made from cotton yarn currently face a 16.50 per cent tariff, which will increase to 36.50 per cent after the reciprocal tariff is imposed. Men's underpants made from knitted fabric currently have a tariff rate of around 6 per cent. With the new reciprocal tariff, it will rise to 26 per cent.

Some apparel products with a current tariff rate of 1 per cent will face a 21 per cent duty after the reciprocal tariff is applied.

Besides apparel, Bangladesh’s footwear exports to the United States had an effective average tariff rate of 8.50 per cent last year. With the imposition of the reciprocal tariff, the effective average tariff rate may rise to 28.50 per cent. In this sector, tariff rates vary by product, ranging from zero to a maximum of 55 per cent.

The effective average tariff on exports of hats and headgear is 7.50 per cent. With the addition of the reciprocal tariff, the rate will increase to 27.50 per cent. Tariff rates in this sector vary by product, ranging from zero to 10.50 per cent.

Last year, the effective average tariff rate on leather products was 12.20 per cent. With the reciprocal tariff coming into effect, this rate will rise to 32.20 per cent. Tariff rates on leather products range from zero to 20 per cent depending on the item.

One such product in the leather sector is leather handbags, which currently face a 9 per cent tariff. After the reciprocal tariff is imposed, the total tariff on this product will increase to 31 per cent.