Bangladesh’s Limited Benefits from U.S. Tariffs on China, Says CPD
Bangladesh is unlikely to gain from U.S. tariffs on China, as exports initially declined post-tariff implementation. The difference in export compositions between Bangladesh and China is significant, with Bangladesh focusing on cotton products, while China centers on man-made fibers. Consequently, Bangladesh does not directly compete with China in tariff-impacted segments.
According to the Center for Policy Dialogue (CPD), Bangladesh is not expected to gain significantly from the tariffs imposed by the United States on China. Following the implementation of a 25% tariff in 2016, Bangladesh initially witnessed a decline in its exports to the U.S., with only a rebound observed this year, suggesting an absence of direct benefit to the country.
A primary reason for this situation is the composition of China’s ready-made garment (RMG) exports, which largely consists of man-made fiber garments, contrasting with Bangladesh’s exports that predominantly feature cotton-based products.
Moreover, the CPD emphasized that Bangladesh does not directly compete with China in the categories affected by these tariffs. Recognizing the diversity in the RMG sector is essential for understanding these market dynamics, as the impact of tariffs on Bangladesh remains indirect.
In conclusion, the CPD’s analysis indicates that Bangladesh will likely not benefit from U.S. tariffs on China, particularly due to the differences in export product composition. The initial decline in exports following the tariffs and the non-competitive nature of Bangladesh’s goods relative to the affected Chinese exports further support this view. Understanding the RMG sector’s diversity is vital in assessing these economic trends.
Original Source: www.fibre2fashion.com
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