The latest salvo of trade war between the United States and China with US preparing to slap tariffs on import of almost all products of the Asian country, has further brighten Bangladesh garment sector’s prospect to increase the market share in the US, said garment leaders and experts.
In its year-long trade battles with China, the US has so far hiked tariffs on Chinese goods worth $200 billion but spared the consumer goods including garment which is also the major export item of Bangladesh to the US market.
But, on Monday the US moved to impose tariff up to 25 per cent on the remaining $300 billion worth of Chinese imports, including consumer goods like clothes, shoes and toys, following tit-for-tat tariff moves in the previous two days.
‘Although this trade war [between the US and China] is not desirable, US orders for garment products will be diverted from China to Bangladesh and other countries,’ Policy Research Institute executive director Ahsan H Mansur told New Age on Tuesday.
He said that Bangladesh garment sectors had already started receiving increased number of orders from US buyers because of the US-China trade war.
‘Bangladesh manufacturers [of garment products] should make preparations to take increased orders. This preparation should be long-term as, I think, the orders which would be shifted from China would not return to the country,’ he said.
A garment exporter who supplies products mainly to the US market told New Age that they had already got increased number of orders from the US buyers in last few months.
‘If the US imposes tariff on Chinese garment items, US buyers will definitely shift orders to other countries including Bangladesh and Vietnam as an increase of 10 per cent tariff on garment items is huge,’ he said.
Trump on Monday in a warning to China also said that he thought US orders of China products would be shifted to Vietnam and other Asian countries if he slapped tariffs on the remaining $300 billion worth of products.
Bangladesh is the third largest apparel exporters to the US market after China and Vietnam.
The latest data released by the Office of Textiles and Apparel, which is affiliated with the US Department of Commerce, showed that garment exports to the US from Bangladesh and Vietnam surged in the first three months of 2019 while exports from China decreased.
Apparel exports from Bangladesh to the US grew by 16.12 per cent to $1.57 billion in January-March of this year from $1.35 billion in the same period of 2018, as the US buyers have shifted their orders from China to other manufacturing countries due to the ongoing trade tensions between the two economic giants.
The data showed that the US import from Vietnam in January-March of 2019 grew by 13.55 per cent to $3.23 billion from $2.84 billion in the same period of last year.
Chinese export to the US in the period fell by 0.70 per cent to $5.73 billion from $5.77 billion in the same period of 2018.
The US Trade Representative’s Office on Monday published a list of about $300 billion worth of Chinese imports, noting that it proposed slapping tariffs of up to 25 per cent on those products.
The USTR office said that a public hearing would be held on June 17 on the list of 3,805 product categories that could be subject to tariffs of up to 25 per cent.
The US move came following China’s move to hike tariffs on $60 billion worth of US products after Trump had hiked tariffs on $200 billion China products. The trade talks from an agreement between the two countries have so far failed to come to fruition.
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