Bangladesh pledges to buy more U.S. cotton amid tariff tension
The Prime Minister of Bangladesh, Muhammad Yunus, has committed in a letter to U.S. President Donald Trump to purchase a larger amount of American cotton, reports "Financial Times." The government aims to save the garment industry in this way after the U.S. imposed 37% tariffs on exports from the country.
The British daily predicts that the American tariffs will lead to the collapse of the garment industry, which operates on thin margins, while at the same time generating 80% of Bangladesh's export revenues.
This industry also plays an important social role, allowing millions of women to improve their financial status. Economists have long warned Bangladesh about relying excessively on just one sector for its economy.
In the letter to Trump, Yunus promised to reduce Bangladesh's tariffs on American products, including gas turbines, semiconductors, and medical equipment. He also presented an offer to "significantly increase" imports of wheat, corn, and soybeans. The Prime Minister also requested a three-month grace period for tariff payments to allow the government in Dhaka to accept a larger volume of U.S. exports to Bangladesh.
The White House has not yet responded to Yunus's letter.
As reported by "FT," Bangladesh is the second-largest cotton importer in the world, after China. The largest source of cotton supplies to the country in the years 2023-24 was West African countries (35%), followed by India and Brazil. The United States accounted for 11% of the imports.
According to garment producers in Bangladesh who supply American companies, if the tariffs remain, they will lose customers to competitive countries. Producers mentioned, among others, Egypt and Kenya, which have 10% tariffs, and Jordan, which has 20% tariffs.
The majority of garment exports from Bangladesh go to major American retail chains, such as JCPenney, Target, and Walmart, where many affordable clothes are sold. Clothing companies expect this sector to suffer more than the one associated with premium brands such as Ralph Lauren or Tommy Hilfiger.
