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

[Saif]

American imports getting cheaper under 500 products' duty cuts

Import taxes on nearly 500 products, including 100 from America, are up for cuts in the upcoming budget to smooth the path of Bangladesh's LDC graduation next year and offset Trump tariffs. Of the items, some 500 goods will see cuts ranging from 20 to 40 per cent in supplementary duty and regulato

thefinancialexpress.com.bd

Recast of tariff structures in budget

American imports getting cheaper under 500 products' duty cuts

WTO tariff compliance after Bangladesh's LDC graduation, aligning with Trump tariffs work

Doulot Akter Mala
Published :
May 30, 2025 00:38
Updated :
May 30, 2025 00:38

Import taxes on nearly 500 products, including 100 from America, are up for cuts in the upcoming budget to smooth the path of Bangladesh's LDC graduation next year and offset Trump tariffs.

Of the items, some 500 goods will see cuts ranging from 20 to 40 per cent in supplementary duty and regulatory duty (RD) while customs duty (CD) would be reduced on 135 items, official sources said.

The items include fish, animal-based items, less-commonly-traded goods, and certain intermediate raw materials.

"We are going to waive CD on 100 items imported from USA to align the tariff rate with reciprocity as desired by the Trump administration," says one revenue official.

To phase out protective tariffs -- meant for providing protection to fledging domestic industries -- import duty would be increased up to threefold on raw materials of 14 manufacturing sectors.

Those coming under the tax hike include beverages, energy-saving bulbs, water purifiers, fans, cigarette paper, and food processing.

Officials say the 'minimum value' system would be phased out for what is dubbed trade parity as it doesn't exist in any countries across the world.

However, as per lending conditions set by the International Monetary Fund (IMF) on mobilising more revenues, the government would increase the fixed value on 24 items for next fiscal year.

To comply with World Trade Organization (WTO) regulations also, tariff values and minimum values are set to be removed for around 40 types of products.

Import duties on raw materials for 59 types of medicines, including those used for cancer treatments, may be withdrawn entirely.

Minimum value refers to a fixed government-declared price below which no product can be assessed for duty, regardless of the declared import price.

This system helps prevent revenue evasion through under-invoicing. However, according to WTO standards, both tariff values and minimum values are inconsistent with global practices.

Bangladesh currently imports around 7,500 genres of products (tariff lines based on HS codes), most of which face very high import tariffs. Over 100 of these imports are subject to tariff-and minimum-value assessments, which have been widely criticized.

Officials have said upon Bangladesh graduating from LDC status, the country will have to move away from such tariff structures. Currently, local industries benefit significantly from tariff walls (high protection), which are not aligned with global standards.

According to the National Board of Revenue (NBR), the average import tariff in Bangladesh is 28 per cent -- more than double the average for LDCs.

Beverages, energy-saving bulbs, water-purifying machines, electric fans, cigarette paper, food processing may come under higher import duty.

Malt extract, food preparations of flour, grouts, meal, starch, or malt extract for infant or young children in bulk, imported by the food industry, nutritional supplements for the food industry for pregnant and breastfeeding women, soya-protein-based food preparations, raw materials for water-purifying machine, woven fabrics of man-made fibers for satin ribbon manufacturing, too, may see a hike in duty taxes.

For beverage concentrates -- CD might be increased from 10 per cent to 15 per cent while import for cigarette paper for tobacco industry may see 100-percent SD in a hike from the existing 60 per cent. The customs duty on non-alloyed aluminum rectangular plates, sheets, and strips for electric-fan manufacturing might be increased to 5.0 per cent from 1.0 per cent.

To promote the local leather industry, the government is likely to reduce customs duty on several chemicals under seven HS codes, including chromium, wattle extract, and tanning extracts of vegetable origin.

Sulphate-import customs duty will be down to 5.0 per cent from 10 per cent. However, VAT at 15 per cent will be applicable to this item.

Specific duty on import of refined sugar is likely to come down to Tk 4,000 from Tk 4,500, supplementary duty on microbus import will be halved from per cent.

The government is likely to facilitate local manufacturing of computers by adding some accessories to the list of pared-down import duties.

Customs duty on bus import is likely to be cut to half at 5.0 per cent from the current rate of 10.

To protect the local abrasive paper industry, the upcoming budget is likely to reduce customs duty on its two major raw materials- Phenolic resins and sandpaper coating materials -- to 5.0 per cent and 15 per cent from the current rates of 10 and 25, respectively.

Steel-industry raw material mould powder is currently facing 25-percent customs duty and a 3.0-percent regulatory duty. The upcoming budget is likely to reduce this to 15% and waive the regulatory duty.

To promote fruit export, the government is likely to reduce customs duty from 25 per cent to 5.0 per cent on fruit-bag imports.

Helicopter import is likely to face a hike in customs duty from 0% to 10%, and 15% VAT, 5% Advance Tax and 5% Advance Income Tax from the next fiscal year.​

 

[Saif]

Reciprocal Tariff: Decision to import wheat, aircraft from the US

Currently, Bangladesh exports goods to the United States at an average tariff of 15 per cent.

en.prothomalo.com

Reciprocal Tariff: Decision to import wheat, aircraft from the US
Fakhrul IslamDhaka
Updated: 27 Jun 2025, 12: 19

US President Donald Trump holds a signed executive order on tariffs on aluminum imports in the Oval Office of the White House in Washington on 10 February Reuters

The additional 37 per cent reciprocal tariff imposed on Bangladeshi exports by the administration of US President Donald Trump may be reduced.

Bilateral negotiations are currently underway, and a final decision could be reached following a meeting between Bangladesh and the United States scheduled for 29 June.

In the meantime, Bangladesh is proactively increasing its bilateral trade with the US. As part of efforts to encourage the US to lower the reciprocal tariff rate, the government is preparing to import 300,000 tonnes of wheat at a higher cost through a government-to-government (G2G) deal.

An initial decision to this effect was taken at a G2G-related committee meeting held at the Secretariat on Thursday, chaired by Food Secretary Masudul Hasan.

In addition, the Ministry of Civil Aviation and Tourism is taking steps to purchase aircraft from US-based Boeing. Bangladesh is also simplifying the process of importing cotton from the United States.

These developments have been confirmed by sources within the Ministry of Food, Ministry of Commerce, and Ministry of Civil Aviation and Tourism. The sources indicated that if the upcoming 29 June talks are successful, the reciprocal tariff rate may be revised downward.

Currently, Bangladesh exports goods to the United States at an average tariff of 15 per cent. However, on 3 April, the Trump administration unexpectedly announced an additional 37 per cent reciprocal tariff, raising the total tariff to 52 per cent.

This was set to take effect from 9 April. On that day, however, the US suspended the implementation of the new tariff on Bangladesh—along with other countries—for a period of three months. That suspension is due to expire on 9 July.

Asked about the decision to import wheat from the United States, a senior official from the Ministry of Food stated that Bangladesh typically imports wheat from Russia and Ukraine, where prices are relatively lower.

Despite this, the government has decided to proceed with US wheat imports at a rate that is USD 20 to USD 25 per tonne higher. The shipping cost from the United States is also higher. However, officials say that US wheat is of higher quality.

Bilateral Discussions Underway
It has been learned that some of the demands made by the United States are based on its own domestic laws and are not applicable under Bangladeshi law. As a result, letters have been exchanged between the two countries to address these differences. A meeting was held in the United States at 6:30 pm Bangladesh time yesterday, where Khalilur Rahman, security adviser to the chief advisor, participated. However, the outcome of the meeting was not immediately known as of last night.

Sources at the Ministry of Commerce said that Bangladesh is currently ahead of other countries engaged in bilateral talks with the United States regarding the reduction of the reciprocal tariff rate. Some countries, such as Indonesia, have stalled at certain stages of discussion. However, senior officials at the Ministry of Commerce remain hopeful that US President Donald Trump may decide to extend the suspension of the reciprocal tariff for another year.

According to data from the US Census Bureau, Bangladesh’s exports to the United States have increased by USD 2.5 billion over the past decade. Meanwhile, imports from the United States have grown by USD 1.25 billion. In 2024, Bangladesh exported goods worth USD 8.36 billion to the US, while importing goods worth USD 2.21 billion, resulting in a trade surplus of USD 6.15 billion in Bangladesh’s favour.

When asked about the overall situation, Selim Raihan, Executive Director of the South Asian Network on Economic Modeling (SANEM), told Prothom Alo, “Bangladesh has taken several initiatives, which are positive from the perspective of the United States. However, we will have to wait until that day to see what happens after 9 July.”

Other Measures

On 7 April, Chief Advisor Professor Muhammad Yunus sent a letter to US President Donald Trump, requesting a three-month postponement of the reciprocal tariff decision. The letter stated that Bangladesh imposes the lowest tariff on US products in the South Asian region. It also mentioned that zero tariffs would continue on US agricultural products and scrap materials. Additionally, Bangladesh is considering a 50 per cent tariff reduction on major US exports such as gas turbines, semiconductors, and medical equipment.

On the same day, Trade Advisor Sheikh Bashiruddin met with officials at the US Embassy in Dhaka in the morning and later sent a separate letter to US Trade Representative (USTR) Ambassador Jameson Greer. In the letter, he noted that Bangladesh currently imposes no tariffs on 190 products and is considering adding 100 more items to the duty-free list. Bangladesh, he emphasized, has always upheld a policy of constructive dialogue and cooperation and is willing to remove any barriers to US exports.

Even after President Trump suspended the reciprocal tariff for three months, several rounds of direct and online meetings and correspondence between the two countries continued. Bangladesh held a meeting with the USTR in Washington on 21 April, during which the US sought clarification on six issues. These were addressed in a follow-up letter sent on 4 June. A draft of the reciprocal tariff agreement was then prepared on 12 June, followed by an online meeting held on 17 June.

Regarding the matter, Commerce Secretary Mahbubur Rahman told Prothom Alo, “The draft is confidential and cannot be published anywhere. Therefore, we are handling the negotiations ourselves.”​

 

[Saif]

US tariff talks: First day ends without major decision

A high-level meeting between Bangladesh and the Office of the United States Trade Representative (USTR) ended in Washington, DC, yesterday without a major decision, despite the looming expiry of a 90-day negotiation window on July 9.

www.thedailystar.net

US tariff talks: First day ends without major decision

A follow-up meeting is scheduled for July 8, and Bangladeshi officials remain hopeful that a breakthrough may be reached by then.

A high-level meeting between Bangladesh and the Office of the United States Trade Representative (USTR) ended in Washington, DC, yesterday without a major decision, despite the looming expiry of a 90-day negotiation window on July 9.

The meeting, held at the USTR headquarters, was led by Bangladesh's Commerce Adviser Sk Bashir Uddin and National Security Adviser Khalilur Rahman. Brendan Lynch, assistant US trade representative for South and Central Asia, represented the US side.

The talks were described as "friendly" and "positive" by a Bangladesh official familiar with the discussion. Bangladesh expects an agreement on the contentious reciprocal tariff issue, which has been under negotiation since early April following President Donald Trump's announcement of sweeping new tariffs.

A follow-up meeting is scheduled for July 8, and Bangladeshi officials remain hopeful that a breakthrough may be reached by then. Commerce Secretary Mahbubur Rahman will fly to the US to join the talks. "I will join the July 8 meeting in Washington," Rahman told The Daily Star.

According to sources, the USTR urged Bangladesh to carry out further technical work to bridge remaining differences. While progress has been made on several fronts, sticking points remain, particularly around rules of origin (RoO), geopolitical alignment clauses, and the structure of tariff reciprocity.

The Trump administration's initial tariff announcement raised duties on Bangladeshi exports to 53 percent from a prior effective rate of 16 percent. Bangladesh is seeking to bring the figure down through a negotiated agreement, offering reciprocal zero-duty access to many US goods in return.

But negotiations have stalled over several "tough conditions," according to officials familiar with the matter. One key demand from Washington is for Bangladesh to adopt regional rather than domestic value addition in its exports, a move Dhaka fears could hurt local industries.

Another contentious clause in the draft agreement would require Bangladesh to mirror US sanctions or embargoes against third countries, effectively aligning Dhaka's trade policy with Washington's geopolitical stance, according to the officials.

For example, if the US imposes a ban on Chinese goods, Bangladesh will be expected to follow suit. "That's simply not feasible given our heavy reliance on Chinese inputs for industrial production," one of the officials said.

Commerce Secretary Rahman acknowledged the challenges: "It is very difficult to reach a consensus under such tough conditions. Negotiations must continue."

LIMITED LEVERAGE

Bangladesh's relative trade size with the US appears to be working against it. While bilateral trade stands at roughly $10 billion -- of which Bangladesh exports $8 billion worth of goods -- the volume pales in comparison to Vietnam's $200 billion trade relationship with the US.

The Trump administration has already signed tariff deals with the UK and Vietnam, and negotiations with India and others are reportedly in the final stages. Under a three-month pause announced in April, Trump pledged to sign 90 reciprocal agreements, but only a handful have been concluded so far.

"Vietnam agreed to zero-duty imports of US goods, and in return secured a 20 percent tariff on its exports to the US, far lower than the 37 percent rate initially imposed," Rahman noted. "Their deeper trade ties made it easier to reach a deal."

By contrast, Bangladesh's lower level of economic interdependence with the US means it has limited leverage to push back on US demands, despite offering substantial concessions.

As the July 9 deadline nears, uncertainty is weighing on exporters worldwide. Surveys showed that manufacturing sentiment is deteriorating across much of the US, Asia and Europe, in part due to anxiety over US tariff policies.

While Washington continues to push for far-reaching bilateral deals, analysts warn that many may remain unsigned due to the complexity of conditions attached.​

 

[Saif]

Washington views its ties with Dhaka through lenses of trade: Michael Kugelman

South Asia affairs expert Michael Kugelman has said the Trump administration has drastically cut foreign aid and has "little interest" in devoting resources to democracy promotion or nation-building in Bangladesh. Referring to recent telephone conversations between Chief Adviser Prof Muhammad Yunu

thefinancialexpress.com.bd

Washington views its ties with Dhaka through lenses of trade: Michael Kugelman
It has "little interest" in devoting resources to democracy promotion in Bangladesh, he says

UNB
Published :
Jul 06, 2025 14:22
Updated :
Jul 06, 2025 14:25

South Asia affairs expert Michael Kugelman has said the Trump administration has drastically cut foreign aid and has "little interest" in devoting resources to democracy promotion or nation-building in Bangladesh.

Referring to recent telephone conversations between Chief Adviser Prof Muhammad Yunus and US Secretary of State Marco Rubio, Kugelman said the readouts of the Yunus-Rubio call from both governments suggest Washington now views its ties with Dhaka through the lenses of trade and great-power competition.

Kugelman, in Foreign Policy’s South Asia Brief, mentioned that the pair spoke about strengthening economic ties and partnering on enhancing security in the Indo-Pacific—the latter of which, for the United States, means countering China.

Both goals present challenges for Dhaka, Kugelman said.

Bangladesh faces a 37 per cent US tariff if it does not work out a trade deal with Washington, said the foreign affairs expert.

And it has long pursued a non-aligned foreign policy, aiming to balance ties with major powers rather than siding with or against them, Kugelman observed.

On Monday, Prof Yunus spoke on the phone with US Secretary of State Marco Rubio, marking one of the highest-level Bangladesh-US engagements to date during the second Trump administration.

The call provides a window into how the United States may approach its relationship with Bangladesh—one that has shifted significantly since Trump returned to office, Kugelman said.

During the final months of the Biden administration, US officials pledged new development aid and technical assistance for reforms to an interim government looking to rebuild democracy in Bangladesh after former Prime Minister Sheikh Hasina fled the country amid mass protests last August.

During the phone call, both sides affirmed their ‘shared commitment’ to deepening economic ties between the two countries.

The US Secretary of State and Chief Adviser also affirmed their shared commitment to ‘enhancing security and stability’ throughout the Indo-Pacific region.

“The Secretary and Chief Adviser affirmed their shared commitment to deepening economic ties between the United States and Bangladesh and to enhancing security and stability throughout the Indo-Pacific region,” said spokesperson at the US State Department Tammy Bruce after the telephone conversation.

In April this year, Chief Adviser Prof Yunus held an emergency meeting with top experts, advisers, and officials, giving necessary directives to deal with the US tariff issue.

The United States had announced a 37 per cent tariff on imports from Bangladesh as part of President Donald Trump's sweeping new "Reciprocal Tariffs" policy.

The government hopes that their ongoing discussions with the US government will help address the tariff issue.

A follow-up meeting is scheduled to take place in the US on July 8.​