Sharif SZM Islam
Background:
On 2 April 2025, US President Mr. Donald Trump announced “reciprocal” tariffs on its trading partners, including Bangladesh, which have been calculated based on a formula using the correlation between the trade deficit of USA and its total imports from these selected trade partner countries. Owing to the higher levels of trade deficits of USA in relation to the large volume of its imports, high tariff rates have been levied on the counties, like, Cambodia (49%), Vietnam (46%) and Bangladesh (37%).
It is usual that the duty/tariffs are borne by importers of the goods, which, in most cases, are passed on to the users/consumers of such imported goods, thereby making these more expensive in the market. Analyzing the results of a study by Yale University’s Budget Lab, it is reported in 3 April 2025 edition of USA Today that “Clothing and textile prices could jump as much as 17% based on all tariffs announced in 2025. The tariffs announced Wednesday may add about 8% of that increase.”
The purposes of raising the market price of imported goods are to incentivize and strengthen domestic industries, with a view to creating and widening employment opportunities for people of the importing country. It is well captured in an article on 3 April 2025 publication of the Forbes magazine, “President Trump’s intention behind the high tariffs is to reshape global trade by addressing longstanding trade imbalances, reducing reliance on imports, and boosting US manufacturing.”
The massive import dependence of the country is evident from the finding that “Over 98% of the retail clothing sold in the United States is imported.” Gross total of the US imports of textiles/apparel to the tune of US$108 billion in 2024 (it reduced from the highest ever of US$132 billion in 2022) evidences the immense size of the market. These data underscore the urgency and enormity of the tasks that lie ahead of the US Administration in respect of re-establishment of the textiles and apparel industry.
The proposition:
With the twin objectives of offsetting the price increases of textiles & garment products resulting from the high tariffs and facilitating the revival of textiles/apparel manufacturing industry in the USA, I submit a proposal to approach President Trump to authorize allocation of facilities and resources for building textiles and apparel manufacturing hubs across the cotton belt of the country. It would be necessary to emphasize that the proposal for establishment of composite textiles and apparel manufacturing plants, on joint venture arrangement between Bangladeshi and US entrepreneurs, are aimed at augmenting resurgence of the USA’s textiles/apparel industry and materializing “roaring back of jobs and factories.”
A review of US statistics shows that both poverty and unemployment rates in the cotton belt States of USA are on the upper range. Locating the US-Bangladesh joint venture textiles/apparel plants in select cotton growing States would likely improve the poverty and unemployment situation in those States. It is noted that poverty rates in some of the cotton growing States are high, as for example, Mississippi (19.58%), Louisiana (18.65%), New Mexico (18.55%), West Virginia (17.10%) & Arkansas (16.08%).
It is envisaged that prominent Bangladeshi textiles and garment entrepreneurs would set up composite factories for production of high demand products for US consumers, as well as for catering to overseas markets. The entrepreneurs from Bangladesh, who have been exporting to US market and who have had long-time business dealings with the renowned textiles/apparel importers of USA, would bring in superb professional expertise, state of the art technical knowledge, and highly experienced managers to replicate the glorious success story they had created and are continually pursuing in Bangladesh.
It is necessary to project, from the outset, that the offer of support of the Bangladeshi entrepreneurs to bring textiles/apparel manufacturing back to USA and to create jobs for the US population, would be a component of the US President Trump’s overall strategy for the nation’s re-industrialization process.
The premise of this proposal is that the qualified Bangladeshi textiles and garments groups/companies would partner with US companies in a number of joint venture projects with non-cash investments on the strengths of possession of sizeable export performance, extensive management experience, and proven production/marketing expertise, while the US partner company of the respective joint venture projects would arrange/provide the capital investment and working capital requirements.
Following the highest-level decision on taking forward this proposal for participation of Bangladeshi entrepreneurs in USA’s Textiles & Apparel industry, the relevant departments of the Government of Bangladesh and US Administration would need to pursue G2G dialogue and negotiations with a view to defining the action plan for B2B engagement of the partnering US and Bangladeshi companies.
Benefits of Bangladesh:
The benefits of engagement in textiles/apparel projects in the USA would be that our entrepreneurs would earn business profit, with substitute non-cash investment, and our country will gain prominence in the global textiles/apparel industry & market. Bangladesh would have an incoming foreign exchange stream from repatriation of the profit earned by Bangladeshi partners of the US joint venture projects.
The engagement in textiles & apparel production in USA and taking a lead role in the efforts towards revival of USA’s clothing industry, will take Bangladesh to the level of a global player in this field. If we do adopt a supportive posture/strategy and can operationalize the joint venture projects in the USA, it will be a significant globalization/internationalization of our country’s Textiles/RMG entrepreneurship.
We may recall that, prior to the British colonization, the Mughal India accounted for 27% of the global GDP of that time, a half of which was contributed by Bengal, having its capital in Dhaka. At that time, Bengal manufactured high quality textiles, such as the legendary Muslin, which the traders from every where, including from China, exported to the European countries. It is our pride that textiles & garment production is in the DNA of our creative people who, spearheaded by our global-minded entrepreneurs, rekindled our glorious textiles heritage, following the achievement of our homeland, Bangladesh.
Sharif SZM Islam, MBA (IBA–DU, Bangladesh), MA Economics (UofT, Canada), is a former international banker, UN professional and Deloitte Advisor
