Hit by US tariff uncertainty, exports slip 3% in Aug

Bangladesh's export
earnings witnessed a slight dip in August as garment shipments to the United
States, its largest market, slowed under a new tariff regime introduced by the
Trump administration.
According to latest data from the Export Promotion Bureau (EPB), merchandise
exports fell by 3 percent year-on-year to $3.91 billion in August.
The overall picture for the fiscal
year's first two months, however, remains stronger. In July-August, total
exports rose by 11 percent from a year earlier to $8.68 billion.
Garments,
which account for more than four-fifths of national export earnings, dragged
down the performance. Apparel shipments fell by 4.5 percent year-on-year to
$7.13 billion during the two-month period. Within this, knitwear exports
dropped 6.34 percent to $3.94 billion, while woven garments fell 2.65 percent
to $3.18 billion, EPB figures show.
The weakness followed earlier declines. In June, garment exports fell 6.31
percent, contributing to a 7.55 percent overall drop in shipments that month.
By contrast, July brought strong growth, when exports reached a 32-month high
with garment exports up 24.7 percent and total exports up 24.9 percent.
The
volatility in the apparel sector stems from adjustment to the new US tariff
structure. In April, the Trump administration imposed a 37 percent tariff on
Bangladeshi garments, later revised to 20 percent after lengthy negotiations.
Exporters
said the uncertainty during the negotiation period prompted many American
buyers to adopt a wait-and-see approach until early August. The disruption
compounded the seasonal slowdown during the long Eid holiday, when factories
paused production and shipments.
The US is the single largest export destination for Bangladesh and the local
exporters ship more than $8.2 billion worth of garment to the American markets
in a year.
Exporters
are hopeful that the garment export will grow to the USA under the favourable
duty structure compared with the competing countries such as India and China,
which face a 50 percent and 30 percent, reciprocal tariffs, respectively.
"Exporters
had front-loaded shipments earlier at the previous 10 percent baseline tariff,
which helped boost July's figures" said Md Shehab Udduza Chowdhury,
vice-president of the Bangladesh Garment Manufacturers and Exporters
Association (BGMEA). In August, the uncertainty led to a slowdown.
"However,
international retailers and brands, especially from the US, are now returning
with a good volume of work orders after the tariff rates were finalised by the
Trump administration," he added. "It is expected that garment
shipments will rebound soon."
Meanwhile,
several other sectors performed better in July–August. Exports of jute and jute
goods, cotton products, home textiles, frozen fish, agricultural produce and
plastics all grew.
"Particularly,
jute and jute goods have made a good recovery, logging nearly a 9 percent
increase, breaking a continuous trend of decline.
Industry
insiders attribute the growth to diversified products.
"Jute
in particular benefited from growing global demand for natural fibre
alternatives to plastic bags. The responses from the international buyers are
also positive as they are adopting the natural fibre bag jute products instead
of plastic goods," said Md Abul Hossain, chairman of the Bangladesh Jute
Mills Association.
Shipment
of leather and leather goods and ceramic sectors did not perform well in
August.
According
to EPD data, leather and leather goods recorded a 1.55 percent year-on-year
decline last month. During the July-August period, however, the sector logged
over 13 percent growth.
Ceramics,
meanwhile, recorded a steep 18.97 percent decline in August. Rubber logged over
58 percent growth to reach $4.39 million.
















