Bangladesh Set To Gain As U.S. Tariffs Reshape Global Cotton Jersey Market
Global trade dynamics for cotton jerseys and pullovers (HS-611020) are shifting as the U.S. imposes higher tariffs on Chinese exports, positioning Bangladesh and Cambodia to benefit from the evolving market landscape.
Cotton jerseys and pullovers remain among the most imported apparel items worldwide, valued for their versatility, comfort, and consistent year-round demand. The United States remains a key market, with steady demand driven by both seasonal fashion trends and everyday comfort needs.
Vietnam Leads Despite Competitive Pressure
Vietnam has emerged as the leading exporter of cotton jerseys and pullovers, with a Revealed Comparative Advantage (RCA) of 4.48. However, Vietnam’s unit value realization (UVR) falls within the mid-range, making its products widely accessible but vulnerable to price competition from lower-cost producers like Bangladesh and China.
Despite its strong position, Vietnam does not benefit from preferential tariff treatment, with cotton jerseys subject to Most Favored Nation (MFN) tariffs in major markets. This lack of tariff advantages, combined with higher UVR, could challenge Vietnam’s competitiveness as global buyers seek more cost-effective sourcing options.
China Faces Rising Tariff Pressure
China, the second-largest exporter of cotton jerseys and pullovers, currently holds the lowest UVR at US$ 10.54/kg and an RCA of 1.02, reflecting its dominance as a low-cost supplier. However, recent tariff increases are expected to challenge this advantage.
The first tariff hike on February 4, 2025, raised China’s tariff rate to 15%, pushing the UVR to around US$ 11.59/kg. A second increase on March 4, 2025, will further raise the rate to 25%, likely driving the UVR to approximately US$ 12.65/kg. While China’s extensive production capacity and economies of scale may help mitigate the impact, the higher tariffs are expected to reduce its overall cost advantage.
Bangladesh Poised to Benefit
Bangladesh stands to gain the most from China’s tariff challenges, with the highest RCA of 27.36 and a competitive UVR of US$ 14.86/kg. Its strong specialization in cotton jersey and pullover exports, combined with cost-effective pricing, makes Bangladesh a top contender for increased market share.
Exporters in Bangladesh benefit from duty-free access to key markets through various trade agreements, a well-established textile infrastructure, and a skilled labor force. As global buyers seek affordable alternatives to Chinese products, Bangladesh is positioned to emerge as a dominant supplier in the U.S. market.
Cambodia Positioned for Growth
Cambodia is another potential winner, with a competitive RCA and a UVR similar to Vietnam’s. Its strong foothold in the textile industry and favorable trade agreements provide an opportunity to capture additional market share as U.S. buyers diversify sourcing. Cambodia’s expanding production capacity and cost advantages position it well to benefit from shifting trade patterns.
Indonesia Faces Challenges from High Costs
Indonesia, with an RCA of 7.1, faces challenges from its higher UVR, which is nearly 1.9 times that of China. Higher labor costs, raw material expenses, and lower economies of scale are driving up production costs, limiting Indonesia’s competitiveness in price-sensitive markets. However, its premium pricing could enable Indonesia to focus on higher-value or niche markets where quality and sustainability are prioritized.
Outlook: Bangladesh Set to Lead
Bangladesh’s combination of low UVR and high RCA positions it as the leading contender to gain from China’s tariff challenges. Its ability to offer competitive pricing, supported by trade agreements and a growing textile infrastructure, gives it a strategic edge.
While China’s higher tariffs will raise costs, its low UVR of US$ 12.65/kg and large production capacity will likely help it maintain a competitive position in the market. However, as buyers look for cost-effective alternatives, Bangladesh is expected to capture a larger share of the U.S. cotton jersey and pullover market, solidifying its dominance in the coming years.
