U.S. Temporarily Halts 37% Duty on Bangladeshi Apparel: Yunus Appeals to Trump for Leniency, Fate of 4 Million Workers Hangs in the Balance

In April 2025, the Trump administration announced a 37% tariff on Bangladeshi garment products, which shocked the Bangladeshi economy. This move caused concern among 4 million garment workers about their livelihoods. The U.S. then postponed the implementation for 90 days but retained a 10% baseline tariff. Yunus, the Chief Advisor of Bangladesh's interim government, wrote to Trump to request a grace period and promised to increase imports of American agricultural products to help reduce the trade surplus, highlighting Bangladesh's fragile position in global trade.

Bangladesh's Garment Industry: Economic Lifeline and Employment Pillar

Bangladesh is home to approximately 170 million people, with about 4 million directly employed in the garment export industry, and tens of millions more indirectly benefiting from it. Since the 1980s, garment manufacturing has become the engine of Bangladesh's economic growth, accounting for 85% of the country's total exports. The United States is one of its largest export markets.

At the 4A Yarn Dyeing factory in Savar, a suburb of Dhaka, 25-year-old seamstress Murshida Akhtar recently secured a new job with a monthly salary of $156, producing high-end jackets for brands like Carhartt and Calvin Klein. She stated, "I'm very worried that if exports decrease, our workload will be cut, and we might even be laid off."

4A Yarn Dyeing exemplifies the transformation and upgrading of Bangladesh's garment industry, featuring modernized equipment and certified by the U.S. LEED green building standards, focusing on high value-added products. However, even so, the industry still struggles to bear the additional pressure of a 10% or higher tariff, especially amid fierce competition with countries like China, India, and Vietnam.

Tariff Policy and Suspension Decision

On April 2, 2025, the U.S. government announced a 37% reciprocal tariff on several countries, including Bangladesh. This move provoked a strong backlash from the Bangladeshi government and industry. Just a week later, on April 9, Washington announced a 90-day suspension of the tariff measures for some countries, including Bangladesh, but maintained a 10% base tariff.

According to data from the U.S. Office of Textiles and Apparel (OTEXA), Bangladesh's garment exports to the U.S. in 2024 amounted to $7.34 billion, slightly higher than $7.28 billion in 2023, but lower than $9.73 billion in 2022. In the first quarter of 2025, Bangladesh's total garment exports to the U.S. reached $2.22 billion, with an annual growth rate of 26.66%, indicating that importers might be stocking up in advance amid tariff policy uncertainty.

Yunus's Letter to Trump: Request for a 90-Day Grace Period

Facing potential economic impacts, Bangladesh's interim government chief advisor Yunus sent a letter to U.S. President Trump in mid-April, formally requesting a 90-day delay in the imposition of the 37% tariff. In the letter, he stated that Bangladesh is at a critical moment of regime change and economic reconstruction, needing time to stabilize the situation and promote trade reforms.

Yunus promised in the letter that Bangladesh would take several measures to address U.S. concerns, including:

• Expanding imports of U.S. agricultural products such as cotton, wheat, corn, and soybeans;
• Setting up dedicated duty-free warehousing facilities to expedite U.S. cotton imports;
• Eliminating non-tariff barriers on U.S. export goods, including simplifying testing, packaging, labeling, and certification procedures;
• Promoting tariff reductions covering major U.S. export items such as gas turbines, semiconductors, and medical equipment;
• Committing to completing all reform measures within the next quarter.

Yunus concluded the letter by writing, "I sincerely hope you can approve this request, giving us three months to smoothly advance these important tasks."

Political and Economic Background

In August 2024, Bangladesh underwent a dramatic political shift, with Prime Minister Sheikh Hasina stepping down under the pressure of an economic crisis and public discontent. The new government is working to stabilize the domestic situation and rebuild the economy. The World Bank and Bangladesh's central bank have downgraded economic growth forecasts for the next two years, indicating potential risks to the country's economy from external shocks.

Garment manufacturers and exporters are widely concerned that if the U.S. resumes the 37% tariff in July, it will lead to order losses, factory closures, and massive unemployment. A former leader of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) noted, "Our main concern is the 'uncertainty'; no one knows what will happen next."

References

• CA Yunus writes to Trump seeking 3-month pause on 37% tariff
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• 川普重稅！「這國」400萬人得丟飯碗 學者批：醜陋的權力展示
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• Trump’s ‘reciprocal tariffs’ and the impending risk for Bangladesh