The United States has moved ahead with a new round of “reciprocal” tariffs that now cover apparel from dozens of countries—including Bangladesh. For Bangladesh, the number many buyers are seeing is 20%. In practice, because clothing already paid US the most-favored-nation (MFN) duties (often ~15–17%), the effective duty burden on Bangladeshi garments now lands around 35–36.5% once the new surcharge is layered on top. By contrast, India faces a much steeper cumulative hit—structured as two tranches of 25% each totaling 50%—a change that is already pushing US brands to reconsider sourcing footprints. The other competitors in the apparel export market are also hovering around with a similar additional tariff burden keeping the playing field close to level, perhaps except India who will be facing the heat.

Where Bangladesh Stands vs. Competitors

1. Bangladesh & Vietnam: Both have been bracketed around the 20% reciprocal tariff tier. For apparel categories that previously paid ~16% MFN, the landed duty is now in the mid-30s. That keeps the two countries broadly aligned on tariff treatment.
2. China: China is going through the most volatile trade relation with US and being another economic super-power, they are reluctant to bow down and negotiate with the US, rather come back with their similar punitive trade tariffs for US as well. Currently, they have a 90-day break from the earlier announced 145% tariff by President Trump which expires on August 12. Their current effective trade rate is around 34%.
3. India: The 50% tariff (25% immediate + 25% later) sharply alters price equations for US buyers; several are instructing Indian suppliers to absorb costs or shift production to lower-tariff alternatives—Bangladesh, Vietnam, even near-shore sites.
4. Pakistan/Indonesia/Sri Lanka: They are clustered near Bangladesh/Vietnam levels (around 20%). Expect intensified competition in basics and value denim where FOBs are tight.

Table 1 shows the latest estimated effective tariff rates for Bangladesh and the other competing countries in the textile and apparel export market. It is seen that India is in a spot of bother with a highest tariff of 50% even more than China which is at par with the other countries in the mid-thirties. However, China’s current tariff period expires on August 12, 2025, so the situation is very fluid at this moment for them.

Table 1: Estimated Effective Tariff Rates as of August 8, 2025

The Likely Impact on US Orders

1. Price Pressure & Volume Risk: Adding a 35% tariff will make clothes cost more in stores. With apparel demand often showing price elasticity around –0.3, a 35% price rise could translate into roughly a 10% drop in volume if fully passed to consumers. However, costs may in reality, will split across brands, suppliers and margins.
2. Order Re-routing: Not just cost-cutting, the immediate diversion is away from India toward countries sitting at or near the 20% tier. Reuters already reports US clients pressing Indian vendors to relocate production—Bangladesh and Vietnam are prime landing spots. For Bangladesh, that’s an opportunity offset: share gains on new programs can cushion margin squeeze on existing ones.
3. Category Mix Will Shift: Lower-margin basics will feel the pinch; buyers may focus Bangladesh on denim, sweaters, and value-added knits where wash, embellishment and compliance credentials justify higher ASPs. Ultra-price-sensitive tees may drift to the very lowest-cost origins—or may just be scaled down to even zero.
4. Compression of Vendor Margins: Expect renegotiations that split the tariff load- partial FOB reductions, tighter payment terms, and higher bar for on-time, in-full. Vendors with weaker compliance or longer lead-times are most exposed.

Table 2: Time-series of Apparel exports to US in billion USD

             The table 2 shows the amounts of apparel exports to US in billion dollars. The figure portrays the growth/degrowth trend. China had a big drop from 45.35% to only 17.99% in the last 3 years. While every country’s export had a negative growth in this period, but Bangladesh’s degrowth has been the minimum. In last 8 years exports from Bangladesh in fact increased from 5.33 billion USD to 7.38 billion. India’s exports are further expected to decline due to the second round of reciprocal tariff adding to the previous 25% tariff.

How Bangladeshi Exporters Can Respond

1. Quote Two Ways: Present buyers with a “landed-with-duty” price and a “duty-shared” option (e.g., supplier absorbs X%, brand absorbs Y%). Keep in mind that the buyers are part of the equation and are scribing through many options. Helping them with a simpler cost sharing model may draw their attention. 
2. Win on Speed: Use AI-assisted design + 3D sampling and pre-approved trims to shave weeks off development. Faster approvals give Bangladesh more calendar to produce—critical when duty narrows price gaps with near-shore rivals.
3. Move Up the Value Ladder: Protect margin with premium denim, functional knits, sweater gauge variety, and sustainable finishes (ozone/laser). Categories that carry storytelling (low water, ZDHC chemistry, LEED plants) survive tariff headwinds better than undifferentiated basics.
4. Lock in Compliance as a Sales Tool: U.S. buyers facing higher costs will prune risk. Make traceability, UFLPA-ready cotton documentation, and wastewater performance part of the pitch. It defends programs when sourcing teams consolidate suppliers.
5. Diversify End-Markets: Keep a pipeline for the EU, UK, Canada, Japan to hedge U.S. volatility, but don’t abandon US relationships—the medium-term share gains from India’s 50% shock are real.

Bottom Line

Bangladesh enters this tariff chapter better positioned than India, roughly on par with Vietnam and several ASEAN peers. The near-term playbook is to protect key programs, court diversions from higher-tariff origins, and upgrade product and speed so that buyers see Bangladesh not merely as a low-cost needle-mover, but as a resilient, value-adding partner. If factories can turn the duty shock into a catalyst for faster development, tighter compliance, and higher-value product, Bangladesh can hold or even grow its share of the US apparel market despite the new cost of entry.

References from: AP News, The White House Press, World Trade Organization, BGMEA, The Financial Express, The Daily Star, The Dhaka Tribune