ADB warns US tariffs could reduce Bangladesh's GDP growth
The Asian Development Bank (ADB) has cautioned that Bangladesh’s economic growth may take a hit if the United States implements its proposed 35% retaliatory tariff on imports.
The ADB, in its July edition of the Asian Development Outlook, said the outlook for Bangladesh’s GDP growth in the 2025–26 fiscal year has been revised downward due to a slowdown in industrial output and exports—two critical pillars of the economy—while warning of the possible fallout from the US tariff. However, the bank did not provide a specific growth projection.
The proposed tariff, scheduled to come into effect on August 1, poses a serious threat to Bangladesh’s key export-driven industries, particularly its $47 billion garment sector, which supplies some of the world’s largest fashion brands. Analysts from S&P Global also highlighted potential ripple effects on the labour market, where millions of workers depend on apparel manufacturing for their livelihoods.
To address these challenges, high-level talks between Bangladesh and officials from the United States Trade Representative (USTR) office are planned for July 29, with Dhaka hoping to negotiate either a reduction or delay of the tariff.
Despite these looming risks, S&P Global has maintained Bangladesh’s credit outlook as “stable,” reaffirming the country’s long-term sovereign credit rating at ‘B+’ and short-term rating at ‘B’ in its report released on July 24. The agency also emphasized that the upcoming 2026 national election could be pivotal for policy stability and long-term economic resilience.
Economists have warned that if the tariffs are imposed as planned, Bangladesh may need to diversify export markets and invest more in high-value manufacturing to cushion the impact on growth and employment.
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