Why Energy Reliability Matters More Than Tariffs for Bangladesh Export Growth

Tariff-driven base effects obscure a stabilising US market

The apparent weakness, however, is largely arithmetical: July 2025 set an all-time monthly record as exporters accelerated US-bound shipments ahead of new tariffs that took effect the following August. TexPro data on combined US imports of Bangladeshi knitted and woven apparel (HS 61 + HS 62) confirms the pattern — shipments peaked in September 2025 during the holiday-shipping window, while the January-May 2026 period ran roughly flat against the prior year, with May itself showing a near-double-digit recovery. The US market, in other words, is stabilising rather than contracting.

The energy constraint is the binding one

Bangladesh Bank's latest assessment frames the macro backdrop with characteristic caution. While citing structural reforms and a Tk 60,000 crore stimulus package as grounds for measured optimism, the central bank explicitly flagged energy shortages — alongside inflation and banking-sector fragility — as a principal risk to the growth trajectory. This is the operative variable for exporters. US tariff schedules are now a known quantity and have been priced into sourcing decisions since mid-2025; power and gas supply disruptions, by contrast, remain an unpredictable operational bottleneck that directly constrains factory throughput. For an industry whose competitive advantage rests on high-volume, low-margin execution, intermittent production halts carry a cost penalty that no tariff rebate can offset.

Diversification underway, but structural questions persist

A recently concluded Bangladesh-Korea trade deal, which Commerce Ministry officials have described as opening doors to new investment and export channels, signals the government's intent to reduce single-market concentration. Yet diversification at the treaty level does not automatically translate into order-book diversification if factories cannot guarantee reliable delivery schedules. The spring 2026 EU economic forecast points to slowing growth and persistent inflationary pressure across Europe — Bangladesh's other major export destination — which suggests demand tailwinds from that bloc will be modest at best. The near-term export outlook, therefore, hinges less on tariff negotiation and more on whether domestic energy infrastructure can sustain consistent production volumes through the peak autumn shipping season.