ADB report concerns: Bangladesh’s export sector in dire straits due to US tariffs

❐ BD Digest Desk

The initiative to impose new additional tariffs under Section 301 of the US Trade Act has created new concerns for Bangladesh’s export sector.

The Asian Development Bank (ADB) warned in its recently released ‘Asian Development Outlook, July 2026’ report that this US initiative could have a long-term negative impact on trade and economic growth not only in Bangladesh but also in the entire Asia-Pacific region.

According to the report, while there were signs of some stability in global trade policy at the beginning of this year, the situation is once again heading towards uncertainty as the Office of the United States Trade Representative (USTR) recently brought forward new investigations and proposals to impose additional tariffs.

The ADB noted that uncertainty in the international business and investment environment has increased due to the lack of clear decisions on the scope, rate, and when the tariffs will take effect.

ADB’s analysis says that if the proposed tariffs are implemented, the effective tariff rates of South Asian countries, including Bangladesh, could increase by an average of 1.2 percentage points. This could reduce the price competitiveness of Bangladesh’s ready-made garments, textiles and other export products in the international market.

The organization believes that the imposition of additional tariffs could also impact the country’s export earnings, production, and employment, as the United States is one of Bangladesh’s largest export markets.

According to the report, the proposed US framework has the potential to impose additional tariffs of between 10 and 12.5 percent on countries accused of failing to effectively implement laws banning the import of goods produced using forced labor.

This USTR initiative is proceeding primarily on the basis of two separate reviews.

The first is a review of the use of forced labor. In this regard, 54 countries, including Bangladesh, have been identified as countries that have failed to take sufficient steps to impose and effectively implement bans on the import of goods produced through forced labor.

The second is a review conducted under Section 301 of the US Trade Act. Under this review, proposals to impose additional tariffs on a total of 60 countries, including Bangladesh, India, China, Japan, and Vietnam, are being considered.

The ADB says that while these proposals are not yet final, their implementation could have significant impacts on international supply chains, export spending, and trade flows. At the same time, it could increase uncertainty about economic activity in Asia in the long term.

According to experts, this assessment by ADB is an important warning for Bangladesh, because a large part of Bangladesh’s exports to the US market depend on the ready-made garment sector. If additional tariffs are implemented, the competitiveness of Bangladeshi exporters may be damaged and buyers may turn to alternative sources.

According to them, to address this risk, emphasis must be placed on labor rights, implementation of labor laws, improvement of working conditions, and ensuring international compliance standards from now on.

In addition, it is necessary to strengthen trade dialogue with the United States, retain potential tariff benefits, and advance initiatives to diversify export markets with equal importance.

According to ADB, if Bangladesh can meet international standards on labor standards and good governance during this time of uncertainty in global trade, it will be easier for it to reduce potential risks and maintain the stability of its export sector in the long term.