The global trade landscape is shifting, and the ripple effects of U.S. policy are reaching far and wide.

President Donald Trump’s administration has hit China and India with sweeping tariffs of up to 50%, a move that has sent shockwaves through both economies. Yet, amidst the turmoil, a surprising beneficiary may emerge: Bangladesh.

While the tariffs spell trouble for giants like India and China, Bangladesh's trade with the U.S. faces lower exposure. This new dynamic could give Bangladesh a powerful, though temporary, competitive edge.

Experts believe this moment could unlock a significant opportunity for the country's ready-made garments (RMG) sector, attracting foreign investment and expanding its foothold in the U.S. market.

But seizing this moment is far from guaranteed. It requires more than simply waiting for a windfall. It demands a hard look at the very foundation of Bangladesh’s success–the deeply flawed model of low-cost, labor-intensive garment production.

For too long, the industry has been propped up by exploitative labor practices, low wages, and unsafe working conditions. International human rights organizations have repeatedly condemned this system, yet meaningful reform has been painfully slow.

The industry’s grim resilience has been built on a perverse competitive advantage: conditions that, while deeply flawed, are seen as "less inhumane" than those in rival nations.

This echoes the darkest chapters of colonial history, like the exploitation of indigo farmers under British rule, a suffering captured vividly in Dinabandhu Mitra’s play Nil Darpan.

Today, many celebrate the RMG sector’s global success while ignoring the human cost at its core.

The urgency of this moment is underscored by the escalating pressure on India. An initial 25% U.S. tariff on Indian goods was joined by another 25% because India continues its energy imports from Russia.

Such an escalation has already put as much as $87 billion of Indian exports at risk–a potentially devastating blow to its garment industry, which already operates on razor-thin margins.

This is Bangladesh's chance to change its story. It can either double down on a broken model and risk a future of ethical condemnation, or it can seize this moment to reform, invest in its workers, and build a truly sustainable and ethical garment industry

Why there are advantages for Bangladesh

With China's exports now facing tariffs of around 30% and India's facing even more penalties, American buyers are actively searching for new, more cost-effective sourcing destinations.

Bangladesh and Vietnam, with their comparatively modest 20%-25% countervailing tariffs, have emerged as clear frontrunners.

Exporters estimate that U.S. importers can save up to 30% on overall costs by sourcing from Bangladesh or Vietnam instead of China or India.

This significant cost differential has piqued the interest of major American brands and buyers, prompting them to re-evaluate their supply chains.

This is a powerful, if fleeting, advantage for Bangladesh's ready-made garment (RMG) industry.

However, a cost advantage alone isn't enough to secure this prize. To turn this window of opportunity into a long-term gain, Bangladesh must urgently address several critical, interconnected challenges.

First, the country must solve the energy crisis. The RMG sector's crucial backward linkage textile industry is being held back by severe gas shortages. To meet rising international demand and deliver on time, a stable and uninterrupted energy supply is non-negotiable.

Second, it needs to fix port congestion. Chronic delays and mismanagement at key ports like Chattogram are a major deterrent.

These inefficiencies reduce competitiveness and frustrate foreign buyers who rely on just-in-time delivery, making improvements to port operations essential.

Third, Bangladesh must ensure political stability. Foreign investment thrives on predictability, and the country must restore public trust in democratic governance by holding timely and credible elections.

Without a stable political environment, sustained investment will remain out of reach.

Fourth, reforms in the financial sector are essential. Exporters need easy access to credit, which requires significant changes in banking policies.

Alongside this, the government must cut through bureaucratic red tape and create a truly business-friendly environment.

These challenges are interdependent. Tackling one or two will not be enough. Bangladesh needs a comprehensive, multi-pronged policy approach to transform this temporary market advantage into a durable position in global value chains

Grabbing the opportunities

For years, Bangladesh struggled to compete directly with the immense economies of China and India. Now, with both giants facing steep tariffs, Bangladesh finds itself in an unexpectedly advantageous position.

But this opportunity isn't a guarantee; it's a test. To win the confidence of international buyers, Bangladesh must meet the non-negotiable benchmarks of product quality and reliable delivery.

Major brands won't hesitate to change suppliers if these standards aren't met. This means Bangladesh must go beyond policy and confront its infrastructural weaknesses and logistical inefficiencies head-on.

As the geopolitical landscape continues to shift, Bangladesh must also remain vigilant. The same tariffs that offer a lifeline may also spur alternative trade coalitions, such as those among BRICS nations, which could create new trade routes and frameworks outside of Western influence.

Bangladesh must be prepared to navigate these realignments to protect its interests.

While the immediate focus is on the ready-made garments (RMG) sector, the potential for new foreign investment extends far beyond it. We can expect to see growth across the entire textile value chain, including spinning, weaving, dyeing, and logistics.

This diversification would not only create new jobs but also develop the country's industrial capacity and technological sophistication.

The fundamental question is how effectively Bangladesh can attract and sustain this new wave of investment. The answer lies in more than just low labor costs and favorable tariffs.

It requires a commitment to broader structural reforms, including infrastructure upgrades, better product quality, stronger institutions, and, most importantly, a more humane and inclusive labor policy.

The path forward for Bangladesh is clear, yet challenging. By acting decisively and strategically, Bangladesh can transform these protectionist policies into a significant economic benefit, securing its position in global export markets for years to come.

This isn't merely an economic opportunity; it's a defining moment. To convert this advantage into real, sustainable dividends, the nation must embark on systemic reforms.

This includes not only addressing infrastructural and logistical bottlenecks but also a resolute commitment to good governance and, crucially, to ethical labor practices.

By doing so, Bangladesh can position itself not just as a low-cost producer, but as a responsible and resilient player in the global supply chain—a true leader in the new world order.

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Dr. Md. Adnan Arif Salim is an Associate Professor, Bangladesh Open University. He can be reached at [email protected]