Country benefit US-China trade war

US’s widening trade deficit with China is a major cause of the country’s economic woes. US government has started imposing protectionist measures on imports from major trading partners like China and Canada.

US has recently decided to slap 25% tariff on imports worth up to US$ 200 billion from China. Bangladesh can directly benefit in the event of an escalating trade war between the US and China, especially if the US imposes higher tariffs on imported Chinese apparel.

Alongside this, Bangladesh can be benefited from the capital flight, as some Chinese apparel manufacturers would be seeking to relocate operations to a country having normal trade ties with the US.

The trade war is contributing to price volatility in the cotton market, which is a key raw material for the apparel sector. China’s stockpiling and procurement of cotton from regional cotton producers like Uzbekistan and India, instead of the US- will cause a mismatch in the demand-supply scenario. Bangladeshi textile manufacturers may suffer, as a result.

Almost all top clothing retailers like H&M, Walmart, JC Penney, Inditex, Zara, Gap, M&S, Uniqlo, C&A, Tesco, Hugo Boss, and Adidas have been souring garment items worth of billion dollars from Bangladesh every year. Presently they are shifting orders from Bangladesh to other countries.

 

 
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