Bangladesh has been placed in the lower 10 percent tariff tier under the newly finalized U.S. Section 301 regime that took effect on July 24, granting local ready-made garment (RMG) exporters a 2.5 percentage point advantage over major global competitors like China, Vietnam, and Thailand.

According to an analysis by Mohiuddin Rubel, Founder and CEO of Bangladesh Apparel Voice, the new tariff structure formalizes temporary measures into a permanent legal framework. Following the U.S. Supreme Court’s February 2026 ruling that struck down "reciprocal" tariffs, the U.S. administration utilized Section 122 authority to impose a temporary 10 percent universal tariff for up to 150 days. The Section 301 forced-labor investigation was scheduled to seamlessly replace the expiring Section 122 tariffs on July 24 without any gap in coverage.

Covering 60 economies, the U.S. Trade Representative's (USTR) forced-labor action placed Bangladesh among 17 economies in the lower 10 percent tier, while China, Vietnam, Thailand, and 35 other nations were assigned a higher 12.5 percent rate. Bangladesh secured the lower rate due to its February 2026 Agreement on Reciprocal Trade (ART) with the U.S., which committed the nation to a forced-labor import ban. By contrast, economies like India, Sri Lanka, and Trinidad and Tobago entered the lower tier by adopting forced-labor bans between June and July, whereas Cambodia held both an ART commitment and adopted an interim ban.

Under the new rules, the USTR has been directed to establish two three-year Tariff Rate Quotas (TRQs)—one for general U.S. textile imports and another specifically for U.S. cotton—when feasible. These TRQs will allow a defined volume of Bangladesh's textile and apparel exports to enter the U.S. duty-free.

Only four economies—Bangladesh, Cambodia, Indonesia, and Malaysia—qualify for these TRQs, while key competitors such as Vietnam, China, and India have been excluded. However, the TRQ mechanism is not yet operational, as USTR has not set an activation date, keeping the flat 10 percent rate applicable to all shipments in the interim.

While Bangladesh holds a tangible tariff edge and an exclusive TRQ opportunity over key rivals, Rubel emphasized that tariff changes alone will not lower overall costs in the U.S. market. To fully capitalize on this positioning amidst intense global competition, Bangladesh must focus on improving productivity, diversifying its product basket, increasing value addition, and investing in innovation.