US Launches Trade Probe Into Bangladesh Exports: Report

New Delhi — The United States has initiated a new trade investigation into Bangladesh and several other economies to assess whether their production policies are contributing to global overcapacity that could affect American manufacturing, according to a report by Dhaka-based The Morning Star.

The probe was launched on March 11 by the Office of the United States Trade Representative (USTR) under Section 301 of the Trade Act of 1974, a trade enforcement provision used by Washington to challenge what it considers unfair foreign trade practices.

According to the report, the USTR believes there is evidence of structural excess production capacity in Bangladesh. The country currently holds a goods trade surplus of about $6.15 billion with the United States.

A major contributor to this surplus is Bangladesh’s textile and garment sector, which dominates the country’s exports to the US. The government also offers cash incentives to exporters across 43 sectors, including textiles and leather products.

The USTR further noted that Bangladesh’s cement industry has significant unused capacity amid one of the sector’s most challenging periods in recent years. In 2024, the country’s cement consumption dropped to 38 million tonnes, less than 40 per cent of its total production capacity, with demand falling further in the following year.

Reacting to the development, Mahmud Hasan Khan, president of the Bangladesh Garment Manufacturers and Exporters Association, said it was concerning to see Bangladesh included in the investigation list.

However, the report suggests the probe may have limited impact on Bangladesh, as many of the issues under review — including production capacity, intellectual property protection and export incentives — may not significantly affect the country’s export structure.

Bangladesh’s manufacturing largely depends on orders from international buyers, meaning production levels are generally aligned with demand rather than mass overproduction.

The report also highlighted that Bangladesh recently amended its labour laws in line with recommendations from the International Labour Organization and ratified three key ILO conventions.

Additionally, the government has begun phasing out export incentives as part of preparations for the country’s transition out of the Least Developed Country (LDC) category, expected in November this year.

With inputs from IANS