A visiting delegation from the United States Trade Representative (USTR) has indicated that Bangladeshi exports to the US may be eligible for partial tariff relief if more than 20% of their raw materials are sourced from the United States.
During a meeting with the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) in Dhaka on Monday, the USTR delegation explained that while this incentive is outlined in a recent US executive order, the tariff reduction would only apply to the portion of the product made from US-sourced materials.
The American team, led by Assistant USTR for South and Central Asia Brendan Lynch, noted that efforts are currently underway to establish a system for verifying the origin of raw materials to ensure compliance. US Customs is working on a framework to ensure traceability, which is expected to be finalised within a designated timeline.
The meeting was hosted by the US Embassy at the Chief of Mission’s Residence in the capital’s Gulshan area.
According to a BGMEA press release issued after the meeting, the delegation confirmed that under the new policy, if more than 20% of a garment product’s materials are sourced from the US, the additional 20% tariff imposed on such products would be proportionately waived.
In response, BGMEA leaders sought clarification on how the use of US-origin materials would be calculated and verified. The USTR officials assured that a standardized process for traceability is being developed by US Customs.
The delegation also underscored the need for Bangladesh to amend its labour laws to align with International Labour Organization (ILO) standards. Brendan Lynch specifically recommended updates to the Bangladesh Labour Act 2006 in accordance with ILO guidelines.
In August, the US reduced its reciprocal tariff rate on Bangladeshi goods to 20%, down from 35%. However, the BGMEA noted that the effective total tariff on ready-made garments (RMG) from Bangladesh remains at 36.5%, and called for further reductions to remain competitive in the US market.
BGMEA President Mahmud Hasan Khan Babu urged the US side to consider the industry’s ongoing improvements and reforms when evaluating future tariff policies.
“We welcome the recent tariff reduction as a positive step,” Babu said. “However, the current overall tariff burden of 36.5% poses a significant challenge for our exports. We believe that the ‘stacking method’—adjusting tariffs by accounting for multiple components—could help ease this pressure and boost our competitiveness.”
The BGMEA also shared updates on Bangladesh’s labour law reforms during the meeting.
According to the BGMEA statement, the USTR delegation expressed satisfaction with the dialogue and showed optimism about increasing US imports from Bangladesh, narrowing the trade imbalance, and potentially offering further tariff relief.