The United States has launched fresh scrutiny of production systems, labour standards, and industrial capacity across several countries, including Bangladesh.
Washington has initiated multiple investigations to determine whether goods produced with forced labour are entering international markets and whether excessive industrial capacity—known as “overcapacity”—exists in certain economies.
Analysts say the investigations, targeting 60 countries including Bangladesh, may appear to be routine policy reviews.
However, their potential implications could be significant for Bangladesh, particularly for its export-driven economy that relies heavily on the readymade garment (RMG) industry. The process may signal possible future tariffs, tighter market access, or increased pressure through trade policies.
The Office of the United States Trade Representative (USTR) said the investigations will be conducted under Section 301 of the Trade Act of 1974.
The probe will examine whether foreign governments have taken effective measures to prevent imports of goods produced through forced labour and whether their policies or practices create barriers to US trade.
US Trade Representative Jamieson Greer said that although there is global consensus against forced labour, many countries have yet to take effective steps to block such products from entering their markets.
As a result, these unethical practices could create unfair competition for American workers and businesses.
The investigation includes economies across different regions, such as Bangladesh, India, Pakistan, China, Vietnam, Thailand, Malaysia, Saudi Arabia, and the United Arab Emirates.
At the same time, the United States has launched a separate probe into possible industrial overcapacity in 16 countries and economic regions, including Bangladesh.
If the United States determines that a country’s policies harm its commercial interests, Section 301 allows Washington to impose higher tariffs, restrict imports, or take other corrective actions.
For Bangladesh, the issue is particularly important because the United States is its largest single export market. A significant share of Bangladesh’s exports—including RMG—are destined for the US.
During July–February of the current fiscal year, Bangladesh exported goods worth about $5.03 billion to the United States, accounting for roughly 19.5% of its total exports.
A new tariff strategy
Analysts believe the investigation is also linked to a recent legal development in the United States.
Earlier, sweeping tariffs had been imposed on foreign goods by citing an economic emergency, but the US Supreme Court recently struck down that move.
Since then, the US administration has been searching for alternative legal frameworks to introduce new tariffs.
Currently, a temporary 10% tariff has been imposed on global imports under Section 122 of the Trade Act of 1974, which is scheduled to expire in July.
At the same time, investigations under Section 301 could pave the way for longer-term tariffs targeting specific countries or sectors. Trade analysts believe such tariffs could range between 25% and 50%.
Prof Mustafizur Rahman, distinguished fellow at the Centre for Policy Dialogue (CPD), noted that the United States often conducts such investigations as part of its global monitoring efforts. Bangladesh, he said, should nonetheless remain prepared.
He added that defining “overproduction” is not straightforward. In a market economy, production naturally fluctuates with demand and supply cycles, which is a normal part of trade dynamics.
According to him, Bangladesh’s export success has largely been driven by labour-intensive production, private sector entrepreneurship, and integration into global value chains—not by heavy industrial subsidies or large-scale state-led industrial planning.
He also pointed out that Bangladesh banned child labour in the 1990s and that significant allegations of forced labour in its industrial sector have not emerged.
Prof Selim Raihan, who teaches economics at the University of Dhaka and executive director of Sanem, believes the investigation signals a tougher stance in global trade policy.
He said the United States is increasingly using trade policy as a tool to revive domestic manufacturing and protect its labour market.
For export-dependent economies like Bangladesh, he added, this is not a distant geopolitical issue but one that directly affects the country’s export structure.
Analysts view the forced labour investigation as a particularly sensitive issue.
Since the 2013 Rana Plaza collapse, Bangladesh’s RMG industry has undergone significant reforms to improve safety and labour standards.
However, analysts believe some segments of the supply chain remain informal, and institutional limitations in enforcing labour rights still exist.
Selim Raihan said global trade is increasingly intertwined with geopolitics, industrial policy, and social standards. As a result, low production costs alone may no longer guarantee market access in the future.
Mahmud Hasan Khan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said Bangladesh’s inclusion in the investigation list may be uncomfortable but does not necessarily signal major risks.
He believes such investigations are part of Washington’s broader strategy to protect domestic industries. Bangladesh’s main export to the United States is ready-made garments, a product that is not produced there in large volumes.
However, he noted that since the investigation has begun, relevant government agencies should prepare in advance and respond with necessary data and information.
Strategic responses
Trade analysts say several strategic steps may now become important for Bangladesh. These include:
- Strengthening labour standards and transparency across supply chains
- Diversifying export markets
- Moving toward higher value-added products
- Taking proactive diplomatic initiatives in bilateral trade discussions
