Bangladesh's $40 billion apparel industry once hailed as a shining star of South Asia is now grappling with an unexpected storm. In a dramatic and unprecedented move, former U.S. President Donald Trump has imposed a steep 37% tariff on Bangladeshi exports to the American market. What was once a symbol of economic strength Bangladesh’s growing trade surplus with the U.S.has quickly turned into vulnerability. This new tariff rate is the second-highest in South Asia and ranks 15th globally, leaving Bangladesh in a disadvantaged position compared to its regional rivals. While India and Pakistan face lower tariffs of 26% and 29%, respectively, Bangladesh's export competitiveness is now under serious threat.

The implications are enormous. A basic Bangladeshi-made shirt, previously taxed at 16% and sold in the U.S. for $11.60, will now exceed $15 making it harder to compete in price-sensitive markets. Industry leaders and economists alike are sounding the alarm. Prof Mustafizur Rahman of CPD warns of declining demand, while Zahid Hussain, former World Bank economist, predicts the ripple effect will reach far beyond the garment sector, impacting logistics, banking, and even Bangladesh’s LDC graduation in 2026.

Exporters, too, are deeply concerned. DBL Group's MA Jabbar called the tariff hike a “big blow,” while Shovon Islam of Sparrow Group described it as a “bolt from the blue.” He noted that countries like Jordan, Egypt, and Kenya may now become more attractive to buyers, thanks to their lower tariff burdens. Shams Mahmud of Shasha Denims added that hopes for relocating industries from China to Bangladesh now face serious doubt.

Yet, amid this adversity lies a glimmer of hope. With Vietnam and Cambodia facing even higher tariffs 46% and 49% respectively Bangladesh could still retain part of its market share. Industry voices now call for immediate diplomatic action, smart negotiation, and a unified pricing strategy to weather this economic storm and protect the future of millions who depend on this thriving industry.