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Bangladesh secures 20% tariff on key garment exports to US

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India faces higher 25% tariff on apparel shipments

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Pakistani exporters cautious about impact of 19% tariff

By Ruma Paul

DHAKA/KARACHI/AHMEDABAD, Aug 1 (Reuters) - Bangladesh

has negotiated a 20% tariff on exports to the U.S., down from

the 37% initially proposed by U.S. President Donald Trump,

bringing relief to exporters in the world's second-largest

garment supplier.

The new rate is in line with those offered to other major

apparel-exporting countries such as Sri Lanka, Vietnam, Pakistan

and Indonesia. India, which failed to reach a comprehensive

agreement with Washington, will face a steeper 25% tariff.

Trump put steep tariffs on exports from dozens of trading

partners, including Canada, Brazil, India and Taiwan, ahead of a

Friday trade deal deadline.

The outcome secured by Bangladesh - home to a $40 billion

apparel export sector - reflects careful negotiation, said

Khalilur Rahman, national security adviser and lead negotiator.

"Protecting our apparel industry was a top priority, but we

also focused our purchase commitments on U.S. agricultural

products. This supports our food security goals and fosters

goodwill with U.S. farming states," Rahman said.

Muhammad Yunus, the head of the country's interim

government, called it a "decisive diplomatic victory".

The readymade garments sector is the backbone of

Bangladesh's economy, accounting for more than 80% of total

export earnings, employing about 4 million workers, and

contributing about 10% to gross domestic product.

The prospect of higher U.S. tariffs has rattled Bangladesh's

ready-made garments industry, which fears losing competitiveness

in one of its largest markets.

"While the 20% tariff will cause some short-term pain,

Bangladesh remains better positioned than many of its

competitors," said Mohiuddin Rubel, additional managing director

at Denim Expert Ltd, which makes jeans and other items for

brands including H&M.

Exporters in neighbouring India said the relatively higher

tariffs levied would hurt the country's textile exports, as its

competitors like Bangladesh, Vietnam and Cambodia got lower

tariffs.

"We are hoping that the tariffs will be rationalised. We

will have to recalibrate our strategies depending on the final

tariff imposed, said Chintan Thakker, chairman of industry body

ASSOCHAM in the state of Gujarat, a major apparel exporter.

'DEVIL WILL BE IN THE DETAILS'

Pakistan, which exported about $4.1 billion worth of apparel

to the United States in the 2024 fiscal year, secured a tariff

rate of 19%, but industry figures were cautious about the

immediate impact.

"Considering India's lower production costs and the

likelihood of it negotiating reduced tariffs in the near term,

Pakistan is unlikely to either gain or lose a meaningful share

in the apparel segment," Musadaq Zulqarnain, founder and chair

of Interloop Limited - a leading Pakistani exporter.

"If the current reciprocal tariff structure holds,

significant investment is likely to flow into DR-CAFTA countries

and Egypt," he said, referring to a trade agreement between the

U.S. and a group of Caribbean and Central American countries.

Elsewhere in South Asia, Sri Lanka also secured a 20% tariff

rate from the U.S., which accounted for 40% of its apparel

exports of $4.8 billion last year.

"The devil will be in the details as there are questions

over issues such as trans-shipment, but overall it's mostly

good," Yohan Lawrence, secretary general of the Joint Apparel

Associations Forum, a Sri Lankan industry body, told Reuters.