The new US tariffs are likely to impact Bangladesh in multiple ways, particularly affecting exports, a key pillar of its economy, economist Selim Raihan said today.

The United States has imposed a 37 percent tariff on imports from Bangladesh under President Donald Trump's new "Reciprocal Tariffs" policy.

"Such tariff measures could significantly hurt exports, particularly the ready-made garment (RMG) sector, the backbone of Bangladesh's economy," said Selim Raihan, executive director of the South Asian Network on Economic Modelling (SANEM).

The RMG sector accounts for over 80 percent of the country's total exports, with the US being one of its largest markets.

"A tariff hike on Bangladeshi apparel could push up costs for US buyers, potentially leading to fewer orders and shifts in sourcing strategies," he said.

In a highly competitive global apparel market, US importers may favor suppliers from countries with lower costs even after the reciprocal tariff, reducing Bangladesh's market share, he added.

"Beyond RMG, other industries such as leather, footwear, and pharmaceuticals, which have increasingly relied on the US market, are also at risk," said Raihan, who is also a professor of economics at Dhaka University.

For instance, Bangladesh's growing pharmaceutical exports could face setbacks if additional tariffs make them less competitive in the US market.

Although Bangladesh already lacks duty-free access to the US due to the suspension of the Generalized System of Preferences (GSP) following the Rana Plaza disaster in 2013, its upcoming graduation from Least Developed Country (LDC) status in 2026 introduces further risks, he said.

The impact may not be limited to exports alone.

Foreign direct investment (FDI) and trade partnerships could be affected by uncertainty surrounding US trade policies, Raihan noted.

"Investors may hesitate to expand operations in Bangladesh, particularly in export-oriented sectors. As global supply chains adjust to new trade barriers, Bangladesh could struggle to maintain its competitive position, affecting job creation and long-term industrial growth."

Multinational corporations may instead shift investments to countries with more stable trade conditions, he added.

The economist said the introduction of reciprocal tariffs by the Trump administration marks an 'unprecedented shift' in global trade, signaling a potential transformation—or even an end—of the Most Favored Nation (MFN) principle, which has long underpinned the GATT/WTO framework.

The GATT/WTO framework, which establishes rules for international trade, aims to reduce trade barriers and promote free and fair trade among nations.

"The future of this principle remains uncertain as varying tariff rates are imposed on different US trading partners and specific product categories."

"This makes it increasingly difficult to determine winners and losers in the US market while contributing to a more volatile global trade environment," he mentioned.

For countries like Bangladesh, this shift presents major challenges, he said.

"To navigate this new landscape, Bangladesh must rethink its trade policies, engage in global trade reforms, and strengthen trade integration with key partners to secure its position in the evolving world order," he added.