In a significant shift in global trade dynamics, Bangladesh has overtaken China to become the second-largest apparel exporter to the United States in the first quarter of 2026.

The shift comes as steep "counter-tariffs" imposed by the Trump administration have gutted China’s market share, even as global demand remains sluggish.

According to data from the Office of Textiles and Apparel (OTEXA), US apparel imports from the world fell by 11.63 percent to $17.73 billion during the January-March 2026 period. While nearly all major manufacturing hubs recorded negative growth, the scale of China’s collapse has allowed Bangladesh to climb the rankings despite its own moderate decline in earnings.

The Tariff Impact: China vs. Bangladesh

The reshuffling of the leaderboard is largely attributed to a series of aggressive trade policies. While Bangladesh’s exports to the US fell by 8.38 percent to $2.04 billion in the first quarter, China’s exports plummeted by a staggering 52.91 percent, falling to just $1.69 billion.

Industry analysts note that this is a direct consequence of the reciprocal tariffs initiated in April 2025. While China faces massive hurdles, Bangladesh secured a strategic trade agreement on February 9, 2026, which reduced its specific counter-tariff rate to 19 percent.

However, the legal landscape remains volatile. Following a February Supreme Court ruling that declared certain emergency tariffs illegal, the US administration applied a new 10 percent duty under the 1974 Trade Act. Just this past week, the US Court of International Trade issued a stay on these duties for specific importers, adding a layer of uncertainty for global buyers.

Vietnam Maintains Dominance

Despite the shifts between Bangladesh and China, Vietnam continues to hold the top spot. It was the only country among the top five suppliers to post positive growth, with its exports rising 2.77 percent to $3.98 billion. Vietnam now commands 22 percent of the US apparel market share, compared to Bangladesh’s 11.5 percent.

Comparative Regional Performance (Jan-Mar 2026):

A "Fragile" Second Place

While the ranking is a milestone, Bangladeshi exporters remain cautious. "Bangladesh rose in rank not because of a surge in our performance, but because China fell significantly faster," noted an industry veteran.

The sector is currently grappling with high inflation, rising energy costs following regional tensions, and a 2.56 percent decline in unit prices. Furthermore, Cambodia has emerged as a fierce competitor, posting a 17.60 percent growth in value during the same period, signaling that the race for "China-plus-one" orders is intensifying.

As the industry looks toward the next quarter, much will depend on the final resolution of US tariff litigations and whether the global "green" push by bodies like the BGMEA can translate into higher price points for Bangladeshi products.