The Trump administration has imposed a fresh 10 percent tariff on Bangladeshi exports, citing Dhaka’s failure to adequately enforce bans on products made with forced labour. Published in the Federal Register last Thursday and taking effect at 12:01 am Washington time on July 24, the new Section 301 duty brings the effective total levy on Bangladeshi goods entering the US market to at least 25 percent, with shipments already in transit exempted until 12:01 am on July 28.

Exporters and government officials said the move will not immediately alter Bangladesh’s competitive footing because the measure merely replaces a temporary 10 percent duty imposed under Section 122 of the Trade Act of 1974. That provision, capped at 150 days to address balance-of-payments differentials, expired on Friday. In effect, the statutory basis has shifted to Section 301 while the overall tax burden remains unchanged.

The action marks the latest turn in a volatile trade trajectory since US President Donald Trump returned to office. Washington initially hit 57 nations with reciprocal duties on April 2, 2025, subjecting Bangladesh to a 37 percent rate that later shifted down to 20 percent, before settling at 19 percent following the bilateral Agreement on Reciprocal Trade (ART) signed on February 9, 2026. Business leaders said the Supreme Court subsequently struck down that 19 percent duty.

Within days of that Supreme Court ruling, President Trump exercised executive authority under Section 122 of the Trade Act to impose a temporary 10 percent tariff, a measure legally capped at 150 days. As that period expired, a fresh 10 percent tariff took effect under Section 301 of the same legislation, driven by an Office of the United States Trade Representative (USTR) investigation into forced labour.

The US Trade Representative launched the Section 301 inquiry on March 12, examining supply-chain practices across 60 nations. Following public submissions, hearings and government consultations, USTR published its report on June 2, concluding that Dhaka and others had failed to implement effective measures to ban imports into the US produced by forced labour.

The newly enacted 10 percent duty covers roughly 99.4 percent of Bangladeshi exports to the United States. Excluded from the measure are fuel oil, gas, fertiliser, selected agricultural products, qualifying goods under the US–Mexico–Canada Agreement (USMCA), and items already subject to Section 232 national security tariffs such as steel, aluminium, copper and automobiles.

The Bangladesh commerce ministry meanwhile said the newly imposed rates will leave the country’s effective tariff standing unchanged.

“The 10 percent tariff earlier in force under Section 122 ceased after midnight US time,” Commerce Minister Khandakar Abdul Muktadir told Bonik Barta, noting constant communication with Washington. “That tariff had addressed balance-of-payments imbalances. Under US law, the president may impose tariffs for a maximum of 150 days to enact temporary safeguards against a country’s exports. With that 150-day window closing on Friday, the initial tariff expires to make way for a newly levied 10 percent duty. The actual rate remains identical, shifting merely to a different legal framework — a transition that leaves Bangladesh’s tariff situation unchanged.”

In a statement, the foreign affairs ministry noted that Bangladesh is among the 17 of 86 trade partners allocated the lower additional rate of 10 percent, arguing that the new tariffs ensure Bangladesh retains its competitive standing in the US apparel and export market.

The ministry noted that while Bangladesh, alongside regional competitors such as Cambodia, India, Indonesia, and Pakistan, faces the 10 percent tariff, several major global apparel manufacturing competitors, specifically China, Vietnam and Thailand, will face the maximum 12.5 percent tariff rate. This differential reinforces Bangladesh’s ongoing comparative advantage in the US market relative to its high-tariff competitors, the statement read.

According to the final decision published in the Federal Register, other nations receiving the 10 percent tier include the United Kingdom, India, Canada, Cambodia, Indonesia, Malaysia, Mexico, Pakistan and Sri Lanka. Bangladesh’s competitors such as China, Vietnam and Thailand now face a 12.5 percent levy, while total duties for the European Union, Japan, South Korea, Taiwan and Switzerland have been calibrated against existing Most Favoured Nation (MFN) rates to reach 10 or 12.5 percent. Dhaka argued this gives its exports a slight relative advantage over key Southeast Asian rivals.

Separately, USTR is evaluating a three-year tariff-rate quota (TRQ) scheme for Bangladesh, Cambodia, Indonesia and Malaysia. The proposed arrangement would waive the additional Section 301 duty on specified garments produced using American cotton and textile inputs — a concession Dhaka believes would reinforce its market position if adopted. The foreign ministry statement added that Bangladesh remained committed to international labor standards and would continue to engage closely with international partners to ensure growth, compliance and sustainability of its critical export sectors.

Industry leaders said Bangladesh’s effective tariff remains unchanged, noting the new levy simply replaces the previous 10 percent temporary duty with an identical rate, keeping the cumulative effective tariff at roughly 25 percent.

“The new announcement changes nothing for us,” said Mahmud Hasan Khan, president of the Bangladesh Garment Manufacturers and Exporters Association. “One 10 percent tariff has merely replaced another. Vietnam was at 10 percent and now faces 12.5 percent, so we may gain a slight edge over Vietnam. But there’s no such advantage over India or Cambodia — they are at 10 percent, same as us.”

Other executives expressed disappointment that February’s bilateral trade deal yielded no lasting tariff relief.

Fazlul Hoque, former president of the Bangladesh Knitwear Manufacturers and Exporters Association and managing director of Plummy Fashions, noted: “There’s no major competitive loss because tariffs have gone up for almost everyone. But the disappointment is that we didn’t get any additional benefit even after signing the ART.”

AK Azad, managing director of Ha-Meem Group, one of the country’s top apparel suppliers to the US, said manufacturers need time to gauge the fallout. “The real effect can only be assessed after discussions with buyers,” he said.

Another major apparel exporter, speaking on condition of anonymity, questioned the rationale of the measure: “The issue is not competition, it is fairness. Bangladesh has a special agreement with the United States, yet the same tariff has been imposed on us. How logical that is remains a question. Moreover, it’s not clear how forced labour is defined or on what basis Bangladesh has been singled out. If forced labour exists in a raw-material source, why should an entire country or an entire industry bear the responsibility?”

Economists warned that while Bangladesh’s competitive footing faces no immediate shock, long-term prospects hinge on trade dialogue with Washington, the enforcement of labour standards, supply-chain transparency and addressing concerns over raw-material sourcing. A proposed tariff-rate quota from the US Trade Representative could open a fresh avenue for garment exports if enacted. Persistently high duties, however, ultimately erode consumer appetite in destination markets — a prospect that continues to weigh on Dhaka.

“The US has imposed a penalty tariff of 10 to 12.5 percent on 60 countries, including Bangladesh, centred on allegations of importing and using goods produced through forced labour,” said Dr M Masrur Reaz, chairman and chief executive of Policy Exchange Bangladesh.

Reaz described the move as unexpected given recent diplomatic momentum. “First, the USTR’s preliminary assessment about six weeks ago noted that Bangladesh had a legal framework but weak enforcement — a gap that wasn’t difficult to close. Second, bilateral relations are exceedingly positive: the two countries signed the ART, Bangladesh agreed to purchase Boeing aircraft, and an MoU on LNG cooperation is in place. Given all this, we expected Bangladesh would receive some priority. The issue should have been managed more proactively after the Section 301 investigation was signalled months ago.”

He added that higher duties eventually feed into retail prices and depress demand by driving up consumer costs, a drag already surfacing across the US market.

According to US Census Bureau data, Bangladesh exported $3.86 billion in goods to the United States between January and May this year, while importing $779 million in American products.