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Bangladeshi textile and spinning millers are preparing to significantly increase imports of US cotton, responding to revised tariff requirements from the United States and aiming to maintain competitiveness in the critical American apparel market.

The move comes after the US government, under new Presidential Actions issued on April 2, introduced a reciprocal tariff structure that offers partial duty exemptions—but only if at least 20 per cent of a product’s customs value is derived from US-origin content.

In practice, this means that products such as garments must incorporate US-made materials—primarily cotton or yarn—to qualify for lower import duties under the US Customs and Border Protection (CBP) rules.

“We are already in talks with a US supplier to import 250 tonnes of cotton, considering the tariff issue,” said Kutubuddin Ahmed, founder and chairman of Envoy Textiles, a top denim exporter. The company currently imports 24,000 tonnes of cotton annually, with only 15 per cent sourced from the US. The goal is to raise that share to 60 per cent.

Envoy, which produces 54 million yards of denim fabric annually, exports 60 per cent of its output to the US market. Ahmed believes the new rules will stimulate investment in spinning and weaving infrastructure while generating employment.

Industry Prepares to Shift Sourcing Strategy

Zaber and Zubair Fabrics, a leading textile exporter with annual exports of $170 million, also plans to increase its US cotton use to 50 per cent of total consumption by year-end. The company currently uses about 30 per cent US cotton, or 750 tonnes, out of its total 2,500-tonne annual consumption.

“Now every brand and retailer will ask us to use US cotton to meet new duty rules,” said Mohammad Abdullah Zaber, the company’s Managing Director. Key US clients include Target, Ralph Lauren, Calvin Klein, American Eagle, Tommy Hilfiger, and Gap.

Textile leaders say the sourcing shift is not merely a compliance measure but also a strategic advantage amid shifting global trade dynamics. The declining role of China and the tariff hikes on Vietnam and India are presenting Bangladesh with a chance to gain global market share.

Industry Seeks Policy Support

Despite optimism, millers caution that US cotton is 3–4 per cent costlier than cotton from other sources. To offset this, Bangladesh Textile Mills Association (BTMA) President Showkat Aziz Russel has called on the government to:

• Lower Export Development Fund (EDF) loan interest rates to 2 per cent for US cotton imports;
• Introduce a cash incentive of 3–4 cents per pound;
• Waive the 1 per cent Advance Income Tax (AIT) on export earnings.

“These policy adjustments are necessary to remain competitive under the new tariff framework,” he said.

Market Dynamics and Cotton Trade Outlook

According to the US Department of Agriculture (USDA), Bangladesh is projected to retain its position as the world’s largest cotton importer in the 2025–26 marketing year, with imports reaching 8.5 million bales.

• US cotton imports are forecast to rise from 1.0 million bales in 2025 to 2.1 million bales by 2028.
• The share of US cotton in total imports will grow from 12 per cent to 25 per cent.
• Import value is projected to nearly double, from $473.8 million to $987.04 million by 2028.

Bangladesh is also planning to establish a dedicated bonded warehouse for duty-free US cotton imports, and Chief Adviser Muhammad Yunus has written to the US President expressing a commitment to increase US agricultural imports as part of bilateral trade diplomacy.

Global Shift in Cotton Trade

The USDA projects a modest rebound in global cotton consumption, reaching a five-year high of 118.1 million bales, led by steady demand from Bangladesh and Vietnam. In contrast, China’s imports are expected to plunge from 15 million bales in MY2024 to 7 million by MY2026, signaling a realignment of global trade flows.

This shift offers an opening for Bangladesh to solidify its role as a global hub in the ready-made garment (RMG) industry, especially as RMG exports surged 13.79 per cent year-on-year, reaching $7.55 billion in FY2024–25, according to Export Promotion Bureau (EPB) data.

“Since mid-January 2025, international brands have resumed placing orders following months of political uncertainty,” the USDA noted, citing a sharp rise in raw material demand—especially cotton.