[🇧🇩] The U.S.A.---A Strategic Partner of Bangladesh

[Saif]

Economists urge FTA talks with US to safeguard $8.0b exports

Bangladesh needs to pursue a strong, evidence-based negotiation and proactively initiate a Free Trade Agreement (FTA) with the US in response to President Donald Trump's declaration of higher tariffs, to safeguard its $8 billion export market in the country. Additionally, comprehensive polic

thefinancialexpress.com.bd

Economists urge FTA talks with US to safeguard $8.0b exports
FE REPORT
Published :
Apr 18, 2025 00:36
Updated :
Apr 18, 2025 00:36

Bangladesh needs to pursue a strong, evidence-based negotiation and proactively initiate a Free Trade Agreement (FTA) with the US in response to President Donald Trump's declaration of higher tariffs, to safeguard its $8 billion export market in the country.

Additionally, comprehensive policy measures are needed to boost export earnings from the US and other countries by diversifying markets and enhancing competitiveness rather than relying on increased imports from the US to address trade imbalances.

These remarks came from experts, economists and representatives of the private sector on Thursday from a dialogue titled "Trump Reciprocal Tariffs and Bangladesh: Implications and Response" organised by the Centre for Policy Dialogue (CPD) at a hotel in the capital.

Professor Rehman Sobhan, Chairman of CPD, delivered special commentary, while Professor Mustafizur Rahman, a distinguished fellow at CPD, presented a keynote paper at the event chaired by Dr Fahmida Khatun, Executive Director of the host organisation.

Md Fazlul Hoque, former President of BKMEA, Dr Mostafa Abid Khan, former Member of the Bangladesh Tariff and Trade Commission, Md Mahbub ur Rahman, CEO of HSBC Bangladesh, Shams Mahmud, President of the Bangladesh Thai Chamber of Commerce and Industry, and Taslima Akter Lima, President of Bangladesh Garments Sramik Sanghati spoke, among others.

Mr Rehman Sobhan said that China is the main target of President Donald Trump as it is the world's largest economy in terms of purchasing power parity (PPP) and holds the highest competitiveness both domestically and globally.

The trade war would create opportunities for boosting export from Bangladesh to China, he said, adding that China-despite being the largest garment exporter to the US-exports around $17 billion annually, significantly more than Bangladesh's $7.0 billion.

Facing a 145 per cent tariff, export from China to the US could drop to nearly zero, while countries like Bangladesh, Vietnam and Cambodia may fill the $17 billion gap, he said. The prominent economist also recommended not to provide any additional facilities for the US in trade and said any concessions for any country must be extended to all countries under the MFN principle.

He said Bangladesh should carefully craft its policy responses, prioritizing export promotion to alternative markets-especially the EU, where it enjoys duty-free access-while enhancing competitiveness to tap into markets like Australia, Canada, and Japan.Professor Mustafizur Rahman stressed the importance of enhancing regional trade partnerships, strengthening South-South cooperation, and strategically positioning Bangladesh amid the potential global trade realignment triggered by the new tariff regime.

Laying stress on evidence-based negotiations, he said Bangladesh collects $180 million annually in duties on US imports at 6.2 per cent average, but it drops to $64 million or 2.2 per cent after rebates. On the other hand, Bangladesh pays $1.08 billion in duties on exports to the US at 15.2 per cent of tariff, added Mustafizur Rahman.

He said Bangladesh would be in a favourable position in negotiations with the US on tariff rates but would likely face major challenges regarding non-tariff barriers, intellectual property rights, labour standards, and related other issues.

He anticipated that the new US tariffs would significantly harm global trade and the US itself, noting that while the full impact remains uncertain, US consumers, buyers, and exporters will be affected.

He said that the effect of the tariff on Bangladesh would depend on the extent of tariff, its duration, and the range of products covered, adding that much would also hinge on how a country responds within the 90-day window after receiving a concession.

He emphasised the need for bilateral negotiation and said the Trade and Investment Cooperation Forum Agreement (Ticfa) would be the key platform for discussion, which needs to be activated through a scheduled meeting.

In that forum, the government must ask which items the US is interested in and assess the potential revenue loss if those items are offered to others, he said.

He undermined the letter issued by Chief Adviser Dr Muhammad Yunus offering free trade access of several items like gas turbines, semiconductors and medical equipment. He said that offering zero tariffs to the US would require similar concessions for other countries under MFN rules of the WTO.

Mustafizur Rahman underscored the importance of signing an FTA with the US to offer exclusive concessions and urged the government to prioritize certification, standardization, and the intellectual property rights (IPR) regime-acknowledging these would be challenging.

However, he noted that the US has FTAs with countries like Costa Rica, the Dominican Republic, Bahrain, and Jordan-none of which are highly developed-suggesting that Bangladesh could also secure one through effective negotiation.

Citing the USTR report, he pointed to US concerns over high tariffs, weak IPR protections, labour standards, and bureaucratic hurdles in Bangladesh, stressing that these issues must be resolved to attract both US and global investment.

It is extremely difficult to respond effectively to the US demand for a balanced trade, as importing goods worth $7 billion within just three months is quite impossible, said Mostafa Abid Khan.

He added that even if Bangladesh reduces tariffs on a particular product, it is not guaranteed that exports from the US to Bangladesh will increase.

Shams Mahmud expressed concern that the massive tariff has disrupted the local supply chain, with some orders held back and clients seeking discounts. He added that local businesses are facing cash flow issues and feared increased harassment by the NBR as they try to meet revenue targets.

Md Fazlul Haque said that the actions of the Trump administration are like an unknown disease-no economist has been able to identify its nature.

"As a result, we are uncertain about what may happen to us. We are not sure which measure will work to resolve this issue," he said.

Babul Akter, General Secretary of the Bangladesh Garment and Industrial Workers Federation, urged the government to provide targeted support to US-exporting factories and avoid using the situation to shut down struggling factories, which could lead to widespread unemployment.​

 

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US wants precise action plan from Bangladesh

The United States has sought to know what steps Bangladesh would take to reduce the trade deficiency between the two countries and how they will execute them.

en.prothomalo.com

US wants precise action plan from Bangladesh
Diplomatic Correspondent Dhaka
Updated: 24 Apr 2025, 20: 13

Courtesy of Bangladesh Embassy in the US

The United States has sought to know what steps Bangladesh would take to reduce the trade deficiency between the two countries and how they will execute them.

Washington wants a precise action plan in this regard from Bangladesh where mention of necessary steps for the sake of changing the labour condition, labour law and intellectual property law is essential.

These issues came up in the talk between chief adviser’s special envoy on international affairs Lutfey Siddiqui and US assistant trade representative for South and Central Asia Brendon Lynch on Wednesday morning (Washington local time).

Lutfey Siddiqui represented Bangladesh and Brendon Lynch represented the US in the bilateral talks.

Chief adviser’s special envoy on international affairs Lutfey Siddiqui and US assistant trade representative for South and Central Asia Brendon Lynch in Washington on 23 April 2025.

Press minister for Bangladesh Embassy in the US, Golam Mortoza told Prothom Alo from Washington that the US has commended Bangladesh during the talks.

After US President Donald Trump decided to impose counter tariffs on different countries, Chief Adviser Professor Muhammad Yunus had sent a letter to the US president on 7 April.

On the same day commerce adviser Sk Bashir Uddin had also sent a letter to United States Trade Representative (USTR) Jamieson Greer. The letter was sent to the US with the request of suspending the counter tariffs for three months. Later, US President Donald Trump suspended the counter tariff for 90 days.

Within a few days of sending the letter, Bangladesh has reflected upon its own initiative to solve the issue through discussion by sending a representative to Washington.

Diplomatic sources report that Bangladesh in the discussion spoke of importing more Soybean oil and LNG alongside cotton to reduce the trade deficiency. The issue of importing goods from the US both on government and private levels came up in the discussions.

At the time it was stated on behalf of the US that nobody expects that the trade deficiency would be gone completely if steps are taken at the moment. However it’s necessary to ensure that Bangladesh is taking visible steps to resolve the matter. The US wants to see precise action plan on what steps Bangladesh would take for that and how they would be implemented.

A source from Washington stated that the US has advised on including issues of bringing necessary changes to labour rights protection, improving their work environment, labour conditions, labour law and intellectual property law alongside reducing the tariffs on goods imported from the US and have planning about the imported goods in the action plan.​

 

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Bangladesh moves toward signing FTA with US

Bangladesh is taking steps toward signing a zero-tariff deal or a Free Trade Agreement (FTA) with the USA in a bid to enhance bilateral trade and investment, according to sources. The Ministry of Commerce (MoC) on Monday formed a high-powered committee to prepare a draft deal and submit it to the

thefinancialexpress.com.bd

Bangladesh moves toward signing FTA with US
Body formed to draft a proposed deal

FE REPORT
Published :
May 15, 2025 09:20
Updated :
May 15, 2025 09:20

Bangladesh is taking steps toward signing a zero-tariff deal or a Free Trade Agreement (FTA) with the USA in a bid to enhance bilateral trade and investment, according to sources.

The Ministry of Commerce (MoC) on Monday formed a high-powered committee to prepare a draft deal and submit it to the commerce secretary within the next 15 days, they said.

According to the terms of reference (ToR), the eight-member body will identify applicable sectors for inclusion in the proposed agreement by giving highest priority to protect the country's interests, trade growth, investment, etc.

The committee would review the recent free-trade agreements between the US and other countries, if necessary. Besides, necessary additions and subtractions can be made to the draft in the light of the ongoing negotiation experience of Bangladesh.

The commerce ministry is currently working to sign FTAs with more than two dozen countries. It has so far signed the lone PTA (Preferential Trade Agreement) with Bhutan, which came into effect on July 1, 2022.

"Feasibility study comes first. Then we can decide on a deal. In fact, we will sign a FTA or PTA with a country only when it is financially and economically viable for our country," said a commerce ministry official.

A bilateral free-trade or preferential-trade pact is a matter of negotiation between two countries. The objectives of FTAs are to achieve zero tariffs between the two signatory countries and reduce trade barriers. No country will agree to a deal if it goes against its interests.

A senior commerce ministry official admitted that progress on negotiating bilateral FTAs with some countries is on the slow lane.

The government is working sincerely on FTA and PTA issues but progress is slow due to delays by potential partner countries, according to the official.

Signing FTAs with some countries may not be feasible for Bangladesh as it could cause heavy revenue losses, according to trade officials.

The process of signing FTAs with some countries is currently at the negotiating stage.

Discussions are underway to sign FTAs and CEPAs with Indonesia, the Eurasian Economic Union (EAEU), Thailand, Malaysia, China, Turkey, APTA, ASEAN, Australia, the GCC, Japan, the Philippines, South Korea, MERCOSUR (The Southern Common Market) and Singapore.​

 

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Bangladesh reducing import duties on over 100 goods to appease Trump

The interim government is set to reduce import duties on at least 100 types of goods in the upcoming budget, aiming to create a favourable ground for negotiations following the additional tariffs imposed by the United States. Chief Advisor Muhammad Yunus gave provisional approval to this move duri

thefinancialexpress.com.bd

Bangladesh reducing import duties on over 100 goods to appease Trump

Published :
May 19, 2025 23:23
Updated :
May 19, 2025 23:23

The interim government is set to reduce import duties on at least 100 types of goods in the upcoming budget, aiming to create a favourable ground for negotiations following the additional tariffs imposed by the United States.

Chief Advisor Muhammad Yunus gave provisional approval to this move during a meeting with the National Board of Revenue (NBR) on Monday.

The financial advisor, NBR chairman and senior officials from the Income Tax, value-added tax (VAT), and Customs policy branches as well as the first and second secretaries were in attendance.

The meeting began at 4:40pm and concluded around 7:10pm.

An official present at the meeting told bdnews24.com, “We proposed zero duties on 100 tariff lines, keeping in mind imports from the United States.

“He (Muhammad Yunus) then asked how we could apply this specifically to the US. We said it was not possible and explained to him that the tariff cuts would primarily benefit the US.”

A tariff line, identified by an HS (Harmonised System) code, refers to a specific customs duty rate assigned to one or more similar products.

Customs duties for imports are determined based on these codes.

The goods include nearly 15–16 items such as oil, gas, arms, fighter aircraft parts and missiles—products that are typically purchased only by the government or in order to lower the trade deficit.

Officials explained that since such government purchases come under special agreements with duty exemptions, there’s no risk of revenue loss in these cases.

In addition, the chief advisor said taxes must not be imposed in areas where revenue potential is low and where it could raise pressure on the general public or create political unrest.

The directive led to proposals in the budget to increase the individual tax-free income threshold. Though the corporate tax rate will remain unchanged, the head of the caretaker government also approved the proposal of some flexibility in compliance requirements.

A notable policy shift includes removing tax exemptions in fisheries, dairy, and poultry sectors—areas where political and administrative elites have often invested to gain tax advantages.

The facility allowing investment of undisclosed income, or black money, in the purchase of houses, flats, and apartments will continue into the next fiscal year.

Although the corporate tax rate may increase, turnover tax is set to double.

A minimum tax of Tk 5,000 will be imposed on all individual taxpayers who fall within the tax net, while the highest personal tax rate will be raised to 30 percent—a move that has also received approval on-principle.

The finance advisor is scheduled to propose the budget for the upcoming fiscal year in the form of an ordinance through state televisions on Jun 2. VAT and customs provisions will come into effect immediately.

Unlike regular years, the budget won’t be discussed in the parliament due to its absence this time. Instead, public discussion, talk shows, and reactions will help shape any necessary adjustments, which will later be formalised by passing the ordinance as the Finance Act.​

 

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Trump’s remittance tax plan poses threat to Bangladesh

The US House Budget Committee voted late on Sunday to move forward with President Donald Trump's "One Big Beautiful Bill Act", a proposal that could make sending money back home more expensive for three lakh Bangladeshis currently living in the United States.

www.thedailystar.net

Trump’s remittance tax plan poses threat to Bangladesh

The US House Budget Committee voted late on Sunday to move forward with President Donald Trump's "One Big Beautiful Bill Act", a proposal that could make sending money back home more expensive for three lakh Bangladeshis currently living in the United States.

The bill proposes a 5 percent tax on all international money transfers made by non-US citizens, including holders of non-immigrant visas such as the H-1B and green card holders.

During the January-March quarter of this year, Bangladesh received the highest amount of remittances from the US -- which was more than 18 percent of the total inflow.

"This is a matter of concern for Bangladesh. It would deal a massive blow to our increasing remittance inflow," said Birupaksha Paul, a professor of economics at the State University of New York in Cortland.

In the first nine months of the 2024–25 fiscal year, Bangladesh received $3.94 billion in remittances from the US, according to the Bangladesh Bank.

If enacted, the US law would deduct 5 percent from the transferred amount at the point of transfer. No minimum exemption has been proposed, meaning even small transfers would be taxed.

The measure could financially hurt around 300,000 Bangladeshis living in the US, according to 2023 estimates from the US Census Bureau.

Describing the proposed levy as "unfair", Paul said, "As people send remittance from their taxed income, it would be unfair to levy tax on remittance again."

He added that the bill might still pass due to the current political landscape in Washington.

"Most of the Congress members are fourth or fifth-generation migrants who no longer send remittances. And there is not much of a voice among economists here."

Paul said that the move comes at a time when the US is grappling with rising public debt and is looking for new revenue sources.

If the bill becomes law, India and several Latin American nations, which also receive large sums in remittances from the US, would feel a sharp impact.

For Bangladesh, Paul recommended allowing the exchange rate to be fully determined fully by the market, rather than offering remittance incentives.

"Better rates may attract remitters more effectively than cash incentives," he said.

Syed Mahbubur Rahman, managing director and CEO of Mutual Trust Bank, echoed similar concerns of Paul.

"If Bangladesh receives $1 billion in remittances from the US, a 5 percent tax would mean a $50 million loss," he said.

"As the US is our top remittance source, the impact would be significantly high," he added. "It would be a scary situation for the country's foreign exchange reserves."

Mohammad Abdur Razzaque, an economist and chairman of the Dhaka-based think tank Research and Policy Integration for Development (RAPID), said the proposed tax could push many back towards using illegal money transfer channels such as hundi, where rates are already more attractive.

"It will particularly affect small remitters," he said. "This is a policy challenge by a foreign country, but it will have serious domestic consequences."

"It is a matter of concern for us as the US is our largest remittance-contributing country."

Razzaque called for a united global response, pointing out that such a tax would undermine international efforts to reduce the cost of sending remittances.

"This is not just about Bangladesh. All affected countries should raise their voices collectively," he said.​