A narrow window for US cotton gains

After a roller coaster period since the reciprocal US tariff was announced in April last year, the cut from 20 percent to 19 percent is modest but offers some relief. Under the new deal, certain Bangladeshi RMG and textile products made with US cotton and man-made fibres can enter the US duty free, with volumes tied to Bangladesh’s purchases. Turning this window into real export gains will require careful planning.

Bangladesh imported an estimated 7.82 million bales of cotton in 2025, down from 8.33 million bales in 2024. Within this, imports of US cotton rose from roughly 0.59 million bales in 2024 to about 0.77 million bales in 2025, according to NBR.

Based on prevailing prices, landed cotton costs per pound in Bangladesh are about $0.68 to $0.72 from the US, $0.58 to $0.62 from Brazil, $0.82 to $0.85 from India and $0.55 to $0.60 from West Africa. This helps explain the recent shift away from Indian cotton towards Brazil, West Africa and the US. While Brazil and West Africa appear cheaper, spinners say lower cleaning efficiency, weaker fibre uniformity and higher contamination often raise processing costs. Once the 19 percent reciprocal tariff on garments made with non-US cotton is factored in, US cotton can become more competitive overall despite its higher upfront price.

Suppose a T-shirt exported from Bangladesh to the US costs $5.00 with Brazilian cotton and $5.15 with US cotton. With a 16.5 percent base duty and no reciprocal tariff, the US cotton T-shirt faces total border charges of about $0.85, for a border price near $6.00. The Brazilian cotton T shirt pays the same base duty plus the 19 percent reciprocal tariff, adding about $0.95 and pushing the border price to roughly $6.80. That gap of about $0.80 per piece, around 16 percent at the US border, shows how US cotton can be more competitive.

According to the Export Promotion Bureau, RMG exports to the US from February 2025 to January 2026 were about $7.54 billion, 19.46 percent of Bangladesh’s total RMG exports of $38.78 billion. US OTEXA data show that from December 2024 to November 2025 Bangladesh exported about $8.18 billion of apparel to the US, around 10.46 percent of total US RMG imports of $78.21 billion.

Competition, however, is intense. China, with $11.35 billion and a 14.5 percent share under a 34 percent tariff, remains a key supplier. Vietnam leads the US market with $16.54 billion and a 21.2 percent share under a 20 percent tariff, driven by China plus one sourcing, higher value products and strong logistics. Indonesia, at $4.63 billion and 5.9 percent under a 19 percent tariff, focuses on more technology-intensive garments. India, at $4.95 billion and 6.3 percent under an 18 percent tariff, leverages vertical integration and stronger infrastructure. Cambodia, at $4.71 billion and 6.0 percent under a 19 percent tariff, combines product specialisation with low costs to complement Vietnam in many brands’ sourcing plans.

Despite price pressure and softer demand, the US will remain critical for Bangladesh’s RMG exports because of its scale and ability to absorb large volumes. With a lower general reciprocal tariff and the new duty-free window for garments made with US cotton and man-made fibres, Bangladesh can consolidate its strengths in basic and mid-range products, where its scale is still hard to match, even as some African producers emerge.

To stay competitive, Bangladesh must sharpen its advantages: faster lead times, better infrastructure, fewer non-tariff barriers and a more welcoming climate for US investment, while reducing the trade gap and safeguarding political stability. It should move up the value chain into mid and high value segments, pair high quality US cotton and strong compliance with tariff advantages.

The writer is a former director of the Bangladesh Garment Manufacturers and Exporters Association