Desk Report,
There will be opportunities to expand business in the US market.
We have been in a state of uncertainty for the last three months regarding the countervailing duties. It is difficult to do business in a state of uncertainty. US buyers were also observing the direction in which the situation would go. It is a relief for us that the countervailing duties have finally been reduced from 35 percent to 20 percent.
There will be opportunities to expand business in the US market.
We have been saying from the beginning that if the countervailing duties on our products are higher than those of our competitors, it will become difficult to do business. However, although our countervailing duties are 1 percent higher than those of our competitors, Pakistan, they are 5 percent lower than those of India. Moreover, they are 10 percent lower than those of China. This is a great relief for us.
Business may temporarily decline due to the additional countervailing duties. The reason for this is that US buyer companies will have to pay higher duties on imported products than before. This will strain their capital. In such a situation, if they cannot arrange additional financing, they will place fewer purchase orders. Moreover, the additional duties will ultimately be passed on to the buyers. If the prices of products increase due to the duties, buyers will be under pressure. This may reduce the sales of products.
Last April, the Trump administration implemented a minimum 10 percent countervailing duty on all countries’ products in the first phase. US buyers have managed it in various ways. Under pressure from some buyer organizations, our suppliers have had to share that additional duty. I want to send a message to our BGMEA (Bangladesh Garment Manufacturers and Exporters Association) members that this additional duty will have to be paid by importers and buyer organizations. And at the end of the day, they will pass it on to US consumers. As a result, this special clear message must be there.
So far, the countervailing duty on China is 30 percent. The US President will soon announce the final countervailing duty on the country. However, as far as we can see, their duty rate will not be lower than ours. As a result, at the end of the day, the purchase orders for ready-made garments from China will continue to be transferred. That will provide an opportunity to expand our business. In that case, factors such as energy supply according to demand, increasing the capacity of Chittagong Port, and political stability must be favorable.
Another important issue is to properly implement the commitments and agreements that Bangladesh has made in the counter-tariff negotiations. These include short-term issues like purchasing wheat, cotton, LNG, and long-term issues like purchasing aircraft. It must be remembered that if there is any negligence here, we can be in danger again.
