Bangladesh’s Exports to EU May Shrink by 20%

Bangladesh’s readymade garment (RMG) exports to the European Union (EU) soared by nearly 37% year-on-year to $3.69 billion in January–February 2025, supported by a 39% rise in shipment volumes. Despite this impressive growth, average unit prices fell by 1.46%, reflecting ongoing profitability challenges.

Bangladesh’s high import tariffs-averaging over 27%, nearly triple the global average-have long sparked debate but little reform due to concerns over revenue loss. With the country set to graduate from Least Developed Country (LDC) status next year, experts and business leaders stress the urgent need for tariff rationalisation to maintain export competitiveness.

The Bangladeshi government has suspended its recent decision to sharply increase export fees on raw jute and jute products after significant backlash from industry players. The fee for raw jute exports was set to rise from Tk 2 to Tk 7 per bale, and for jute products from Tk 0.10 to Tk 0.50 per Tk 100—marking a substantial jump after 30 years.

Bangladesh’s apparel manufacturers warn that without a permanent removal of the 37% tariff on exports to the US, the sector will face an additional $250 million in duties each month, threatening the survival of about 1,000 factories. Industry leaders are urging the interim government to negotiate with the US for a complete and lasting tariff withdrawal.

Bangladesh's garment exports to the United States increased by 17.23 percent during the July-March period of FY2024-25, despite concerns over potential tariffs. The US accounted for 18.97 percent of Bangladesh's total garment exports, with shipments valued at $5.74 billion. Overall, Bangladesh's ready-made garment (RMG) exports grew by 10.84 percent, reaching $30.25 billion.

International Chamber of Commerce Bangladesh (ICC Bangladesh) President Mahbubur Rahman has urged the government to pursue direct diplomatic negotiations with the US in response to the new reciprocal tariff regime announced by President Trump. At a press briefing in Dhaka, he proposed forming a Ministry of Commerce-led taskforce including major trade stakeholders to monitor bilateral trade and develop solutions to reduce the trade imbalance.