[🇧🇩] Trump's Victory/Tariff/ Bangladesh

[Saif]

How to mitigate the impact of Trump’s reciprocal tariffs

Bangladesh faced a crippling 37 percent tariff on its exports to the US.

www.thedailystar.net

How to mitigate the impact of Trump’s reciprocal tariffs

RMG exports, the engine of Bangladesh's external economy, account for more than 85 percent of its exports to the US. FILE PHOTO: REUTERS

The United States government's decision on reciprocal tariffs has sent shockwaves through financial markets and reverberated through economies worldwide. On April 2, the US introduced a sweeping tariff policy, imposing a baseline 10 percent reciprocal tariff on all imports and even higher country-specific tariffs. Bangladesh faced a crippling 37 percent tariff on its exports to the US. This new tariff regime not only sparked a global market crash but also ignited diplomatic and economic turmoil. Of course, a 90-day pause in the tariff decisions was placed within a week.

The market reaction was just one factor among several influencing the temporary change of decision on the tariffs. Growing political concern, both within the US and among international trading partners, has also been an issue. Many industry leaders and governments voiced unease over the economic uncertainty caused by these new tariffs. Concurrently, diplomatic negotiations took place, especially with countries that had avoided retaliatory measures. These combined factors led to the temporary suspension of tariffs on April 9 for more than 75 countries, while maintaining—and in some cases strengthening—the measures specifically directed towards China.

The US decision to impose a 145 percent tariff was met with a retaliatory 125 percent tariff from China on American goods. This tit-for-tat dynamic suggests that what was once a strategic economic rivalry has now spiralled into a trade war with far-reaching global consequences, where collateral damage is inevitable. For smaller export-dependent economies like Bangladesh, which are plugged into global supply chains through their economic activities, the repercussions are significant.

Bangladesh's trade in goods with the US is about $10.6 billion. In 2024, our total goods exports to the US were $8.4 billion, and imports from the US amounted to $2.2 billion. The additional 37 percent reciprocal tariff, if put into effect, presents a threat to Bangladesh's exports, especially its RMG sector, which is its economic lifeblood. RMG exports account for more than 85 percent of the country's exports to the US. Though a Least Developed Country (LDC), Bangladesh has not been allowed duty-free, quota-free (DFQF) market access for its RMG to the US since 2013. The country has already been paying a 15 percent tariff for its RMG products to enter the US market.

The new tariff regime will make Bangladeshi goods significantly more expensive in the US. As a result, US buyers may opt for suppliers from countries not subjected to the same tariff burdens—and Bangladesh risks losing market share in one of its most critical export destinations. The price shock could be absorbed by US buyers and Bangladeshi exporters to shield consumers from high prices. But whether, and by how much, the increased cost will be shared by exporters and importers is uncertain.

The RMG sector is not only the engine of Bangladesh's external economy but also an important source of employment. Therefore, the consequences of these tariffs for the RMG industry cannot be ignored. A reduction in orders from US retailers due to higher prices could force factories to cut back on production. In a labour-intensive industry, this will lead to job losses. Such a reduction could also have social ramifications—from rising unemployment and poverty to increased pressure on public services and social safety nets.

Beyond the direct impact on exporters and workers, high tariffs also threaten to disrupt Bangladesh's macroeconomic stability. Lower export earnings could lead to a widening trade deficit and reduced foreign exchange reserves. Additionally, the anticipated decline in US demand could push Bangladeshi manufacturers to slash profit margins and invest less in innovation, skills, and sustainability measures.

Following the US tariff announcement, the Bangladesh government wrote a letter to the US president on April 7 requesting the US to postpone the implementation of the tariffs for three months. Bangladesh has signalled a willingness to import more US products, including agricultural commodities like cotton, wheat, and soybeans, in an attempt to reduce the existing trade deficit.

One of the unfinished tasks has been developing a robust export sector in Bangladesh through diversification of both export products and markets. Dependency on a single export product is a weak trade strategy, as it is subject to vulnerability from both domestic and external shocks. Product diversification also includes the expansion of items within the RMG industry. Beyond RMG, leather products and pharmaceuticals also have a higher export potential. Diversification of markets will also help buffer against trade shocks to some extent. Moreover, Bangladesh must continue to invest in enhancing the quality and value of its products through improved designs, sustainability certifications, and compliance with international labour and environmental standards to maintain its competitive edge.

Since powerful countries have consistently undermined the rule-based multilateral trading system over the years, the objective of the World Trade Organization (WTO) to promote open and fair trade globally by reducing or eliminating tariffs has been facing challenges. Therefore, WTO member-states have resorted to plurilateral and bilateral trade agreements. Bangladesh is lagging behind in this regard. We should negotiate free trade agreements (FTAs) with our trading partners to prepare a robust trade sector. Countries such as Vietnam and Cambodia, which also export RMG products, have moved far ahead in this regard, enhancing their market access and export competitiveness.

Bangladesh should aggressively pursue FTAs that will offer tariff-free or reduced-tariff access to other markets. Strengthening its presence in regional trade blocs like BIMSTEC and deepening engagement with ASEAN economies could open new pathways for trade growth and regional integration. To achieve these objectives, the government must also align domestic policies with international standards, particularly concerning labour rights and environmental regulations. A thorough review of its tariff structures is also important. This is especially so as the country will graduate from LDC status in November 2026—when it will no longer enjoy non-reciprocity of tariff measures with its trading partners.

As part of trade policy reform, Bangladesh should demonstrate its commitment to fair trade by reducing non-tariff barriers (NTBs) and improving customs facilitation. Capacity-building across industries—via training programmes, technology adoption, and quality assurance mechanisms—will be essential to elevate the country's exports beyond price sensitivity.

The 90-day window is, therefore, an opportunity for Bangladesh to prove its diplomatic agility, economic foresight, and institutional capacity to respond to external shocks. Of course, it will take a long time to implement trade reforms. But if worked on systematically, Bangladesh can turn this challenge into a catalyst for transformation. It can leverage this critical moment for sustainable growth that is less dependent on preferential access and more rooted in innovation, diversification, quality, and productivity.

Dr Fahmida Khatun is executive director at the Centre for Policy Dialogue (CPD). Views expressed in this article are the author's own.​

 

[Saif]

Can Bangladesh ride out the wave of US tariffs?

The global trading system, largely unchanged for a century, got a rude awakening on April 2 when US President Donald Trump slapped massive tariffs on imports into his country. The move sent shockwaves through world markets -- because when America sneezes, the global economy catches a cold.

www.thedailystar.net

Can Bangladesh ride out the wave of US tariffs?

The global trading system, largely unchanged for a century, got a rude awakening on April 2 when US President Donald Trump slapped massive tariffs on imports into his country. The move sent shockwaves through world markets -- because when America sneezes, the global economy catches a cold.

At the heart of the storm is a staggering 145 percent tariff on Chinese goods. For Bangladesh, the hit was smaller but still painful -- a new 37 percent duty on top of existing taxes.

The announcement sent businesses scrambling. Orders froze. Buyers demanded discounts. Stock markets plummeted.

The tariffs were to take effect on the night of April 9. Then, at the eleventh hour, Trump suddenly paused the tariffs for 90 days -- except for China, which remains locked in a trade war with Washington.

However, the 10 percent baseline tariff on all products entering the American market will continue.

WHY NOW?

Trump had promised brutal tariffs during his 2024 campaign, vowing to bring manufacturing back to America. By following through, he aims to revive American manufacturing and boost domestic agricultural sales.

His administration specifically wants to bring back production of high-tech goods like microchips, where China dominates the market.

China's stranglehold on high-tech industries, like semiconductor chips -- a $400 product that takes just hours to make but which the US can't produce cheaply anymore.

But why hit Bangladesh, a country that mostly sells garment items?

Simple: leverage.

Trump knows apparel-exporting nations depend on the US market. By squeezing them, he gains bargaining chips for future deals.

Interestingly, Trump doesn't prioritise mass production sectors like apparel due to their labour-intensive nature. Still, he imposed tariffs on apparel-producing countries like Bangladesh to gain leverage for future negotiations.

WHAT DOES THE HIGH TARIFF MEAN FOR BANGLADESH?

The US has long been Bangladesh's largest export destination, especially for garments, which account for over 90 percent of Bangladesh's exports to the US.

The US buys over $8 billion a year in garments from Bangladesh. But now, with tariffs set to jump from 16.1 percent to 53.5 percent, factory owners are sweating.

Currently, Bangladesh is the third-largest apparel supplier to the US market after China and Vietnam respectively, accounting for around 9.3 percent of total US garment imports of $105 billion in a year, according to official data.

Bangladesh's garment export to the US was recovering from a slowdown over the last two years brought on by the severe fallout of Covid-19, Russia-Ukraine war, and historic inflationary pressure on the Western consumers.

The American government does not allow duty benefits on garment imports except for from 39 African countries under the African Growth and Opportunity Act.

So, Bangladesh does not enjoy duty benefits on garment shipments to the US.

Although the US agreed to allow duty free benefit for 97 percent of goods originated in the least developed countries (LDCs), it kept Bangladeshi garment items in the remaining three percent.

Still, Bangladesh's apparel exports to the US reached $1.5 billion during the January–February period of 2025, up 26.64 percent from $1.18 billion year-on-year, according to the US Office of Textiles and Apparel (OTEXA), a wing of the US Department of Commerce.

In the same timeframe, the US' global apparel imports increased by 11.2 percent to $13.55 billion.

During this time frame, the growth rates for apparel imports from other key countries stood at 8.85 percent for China, 25.70 percent for India, 23.05 percent for Pakistan, and 11.14 percent for Vietnam.

The US imported 23.38 percent more from Bangladesh, 7.25 percent more from Vietnam, 5.78 percent more from China, 31.90 percent more from India, 24.68 percent more from Pakistan compared to January-February 2024. The unit price per piece experienced a positive growth of 2.64 percent for Bangladesh.

There's a twist in the latest tariff shock, though.

China and Vietnam -- Bangladesh's top rivals -- got hit even harder.

If their goods become too expensive for American buyers, Bangladesh could steal market share.

If Trump enforces the full tariff structure after the 90-day pause, countries like China, Vietnam, and Cambodia could lose competitiveness.

However, India and Pakistan -- facing lower tariffs than Bangladesh -- could attract more work orders, causing some buyers to shift from Bangladesh to these nations, along with Egypt, Kenya, and Turkey.

Despite these challenges, trade experts say Bangladesh remains cost-competitive due to its skilled workforce, lower production costs, and large manufacturing capacity.

For example, if international clothing retailers and brands pay $10 for a T-shirt from China or Vietnam, it might cost only $5–$6 from Bangladesh.

GLOBAL PRICE WARS AHEAD?

With higher tariffs pushing China and Vietnam out of the US market, they may focus more on European and Asian markets, sparking fierce price wars. This could affect all major apparel suppliers, including Bangladesh, as global buyers push for lower prices.

If China, Vietnam, Bangladesh, India and Pakistan supply to the same markets, the international clothing retailers and brands will take the opportunity to seek price cuts from the local suppliers.

At the same time, US-based retailers, who pay the tariffs, are negotiating with suppliers in Bangladesh to share the added costs. This pressure could impact profitability for Bangladeshi manufacturers.

CURRENT US-BANGLADESH TRADE OUTLOOK

Historically, the balance of trade between Bangladesh and the US has been heavily tilted towards Bangladesh because of higher garment shipments to American markets, especially woven garments such as trousers and T-shirts.

Last year, Bangladesh exported goods worth $8.36 billion to the US, up from $8.27 billion in 2023, according to data from the United States Bureau of Census.

On the other hand, Bangladesh imported just $2.21 billion worth of goods from the US in 2024, down from $2.24 billion in 2023. Bangladesh mainly imported cotton, soybean seeds, iron and steel products from the USA.

While Trump's tariff strategy aims to protect domestic industries, American consumers could ultimately bear the cost. Since importers pay the tariff and often pass it on to consumers, prices are expected to rise.

As such, major US trade bodies, including the American Apparel and Footwear Association, the United States Fashion Industry Association, and the National Retail Federation, have expressed concern. They warn that higher tariffs may increase living costs, spark inflation, and possibly lead to a recession.

BANGLADESH'S DIPLOMATIC RESPONSE

Bangladesh has already taken steps to address the situation.

Chief Adviser to the interim government Professor Muhammad Yunus sent a letter to Trump seeking a pause for 90 days and Commerce Adviser Sk Bashir Uddin sent another letter to the United States Trade Representative (USTR), the chief trade negotiation body for the American government, offering duty-free benefit to another 100 American goods in addition to the 190 already privy to such benefits.

A team is scheduled to travel to the USA on April 21 to hold negotiations with the USTR for lowering the tariff rates for Bangladesh.

A WINDOW OF OPPORTUNITY?

Like other countries, Bangladesh has also been left to calculate whether this is an opportunity or a threat. So far, analyses show that while the tariffs pose challenges, they may also offer opportunities if Bangladesh plays its cards right

For instance, China may lose a big market share due to the 145 percent tariff.

Bangladesh has a lot of skilled workforce, higher installed capacity, lower prices, lower production cost and lower tariff rates compared with China and Vietnam.

So, losing Chinese and Vietnamese competition could help Bangladesh gain market share -- if it acts strategically.

"It's an opportunity if we can play our cards right. It's a disaster if we don't engage in meaningful economic diplomacy," said Rubana Huq, a former president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

"Everything will depend on strong diplomatic moves. Above all, we must connect with the key personnel in the Trump administration, who in this case is Scott Bessent, who has been entrusted by Trump to deal with individual countries. Strategic alignments are needed besides committing to more imports and removal of non-trade barriers," Huq said.

"Let's remember that Vietnam, in spite of reaching out to Trump at the very beginning, is now being viewed as an adversary of the US administration just because there are discourses on regional interests, which have just started in Asia.

"Meanwhile, India is in a comparatively favourable position as they are single-handedly wooing the Trump administration. So, it's about giving the right dose of attention to the US for being the single largest export destination for Bangladesh."

AK Azad, managing director of Ha-Meem Group which exports 90 percent of its products to the US, said Bangladesh should negotiate with the aim of gaining something positive from this game.

Bangladesh should offer a zero-duty rate on the import of American goods. If it does so, then the US may also offer zero-duty benefits on Bangladeshi imports. This will be a huge benefit for Bangladesh from this game, Azad said.

Mohammad Abdur Razzaque, chairman of Research and Policy Integration for Development (RAPID), said if the 145 percent tariff on China is finally fixed, it may present a window of opportunity for Bangladesh.

Since Vietnam has also been facing higher tariffs, the Chinese investment in Vietnam may also be affected. However, it is really difficult to say anything definite because Trump is unpredictable, Razzaque said.

At the same time, Bangladesh's supply side should also be increased and improved.

For instance, 75 percent of Chinese garments exported to the US are composed of man-made fibre-based items, but Bangladesh is not so strong in man-made garment items. If Bangladesh does not invest more in backwards integration of the garment industry, the country may not benefit a lot from this tariff game, he added.​

 

[Saif]

Ensuring US market access

The three-month pause on "reciprocal" tariffs announced by the Trump administration for all countries except China leaves a narrow window for action. While three months is scarcely enough time for any government to negotiate a complex trade deal, this is the timeframe within which Bangladesh must o

thefinancialexpress.com.bd

Ensuring US market access
Published :
Apr 19, 2025 22:53
Updated :
Apr 19, 2025 22:53

The three-month pause on "reciprocal" tariffs announced by the Trump administration for all countries except China leaves a narrow window for action. While three months is scarcely enough time for any government to negotiate a complex trade deal, this is the timeframe within which Bangladesh must operate. In his letter to the US president Donald Trump, chief adviser Muhammad Yunus had requested the postponement of US tariff measures for this specific duration, a period he said was needed to implement initiatives to increase US exports to Bangladesh. With his wish granted, it is now the government's responsibility to seize this opportunity to protect the largest single-country destination for Bangladesh's goods.

Against this backdrop, the Centre for Policy Dialogue (CPD) recently organised a discussion titled "Trump Reciprocal Tariffs and Bangladesh: Implications and Response" to examine the strategies for responding to the emerging situation. It is already well established that, contrary to its name, the US's reciprocal tariff is not truly reciprocal but rather a unilateral measure aimed at reducing its trade deficit. As noted during the discussion, exports from the US to Bangladesh face an average duty of 6.2 per cent, which drops to 2.2 per cent after rebates, while Bangladeshi products entering the US face tariffs averaging 15.2 percent. Given that the existing tariff structure already favours the United States, any proposition from Bangladesh for further tariff reductions is unlikely to generate reciprocal interest. Some experts at the CPD event suggested that securing a Free Trade Agreement (FTA) with the US could help safeguard Bangladesh's export market. Examples of several developing countries, such as Jordan, which have FTAs with the US, were cited to illustrate the possibility of Bangladesh achieving such an agreement through effective negotiation. However, this policy suggestion misses the mark, as the primary focus of the US tariff measures is to increase its exports to address trade deficits. It is therefore highly improbable that the US would agree to reduce tariffs without this key concern being addressed. It is worth noting that having an FTA did not prevent Jordan from being subjected to 20 per cent reciprocal tariffs as it maintained a trade balance unfavourable to the US.

While pursuing an FTA and activating the Trade and Investment Cooperation Forum Agreement (TICFA) as suggested in the CPD dialogue may be valuable in the long term, the severely limited timeframe within which Bangladesh must find a solution renders this approach less useful. Any viable solution to navigate the current challenge must involve a positive response to the US demand for a more balanced trade relationship. There are indeed measures that Bangladesh can take towards achieving this. For instance, Bangladesh's top imported item is refined petroleum, valued at almost $7 billion per year, primarily sourced from countries with which Bangladesh holds significant trade deficits, including China, India, Malaysia and Singapore. Another major import of Bangladesh is cotton and cotton yarn, procured mainly from China and India. Notably, the United States is the world's leading exporter of both refined petroleum and raw cotton. Rather than importing these crucial items from countries with whom Bangladesh already has substantial trade deficit, redirecting a portion of these imports to the US could be a pragmatic move toward balancing bilateral trade.

For long-term security and resilience, Bangladesh must diversify its export markets to reduce the risks of over-reliance on any single market. However, extraordinary circumstances call for extraordinary measures, and in the short term, redirecting key imports to the US appears to be the most viable option. If pursued deftly, such a strategy could not only help Bangladesh avoid punitive tariffs but also create additional entry points for its products in the US market.​

 

[Saif]

US tariff strategy demands smart diplomacy, structural reforms in Bangladesh: Experts

The United States' evolving reciprocal tariff policy poses both risks and opportunities for Bangladesh, and the country must prepare strategically to appropriate the changing global trade landscape, experts said at a seminar on Sunday. The seminar titled "Emerging Landscape of Trade: Trump's Tarif

thefinancialexpress.com.bd

US tariff strategy demands smart diplomacy, structural reforms in Bangladesh: Experts
FE ONLINE REPORT
Published :
Apr 20, 2025 20:40
Updated :
Apr 20, 2025 20:40

The United States' evolving reciprocal tariff policy poses both risks and opportunities for Bangladesh, and the country must prepare strategically to appropriate the changing global trade landscape, experts said at a seminar on Sunday.

The seminar titled "Emerging Landscape of Trade: Trump's Tariff Policy and Its Implications for Bangladesh" was organised by DACCA Institute of Research and Analytics, held at the Bishow Shahitto Kendro, in the city.

Dr Kazi Iqbal, Research Director at the Bangladesh Institute of Development Studies (BIDS), chaired the session, while Dr Deen Islam, Associate Professor at Dhaka University, presented the keynote paper.

The paper said that a forward-looking, diversified export strategy—backed by smart diplomacy, structural reforms, and private sector innovation—is essential for Bangladesh to thrive under the new trade regime.

“Being prepared will determine whether Bangladesh is sidelined or elevated in the new trade architecture,” said Dr Islam, stressing that tariff wars, shifting alliances, and non-tariff barriers require both tactical and long-term responses.

Md Mamun-Ur-Rashid Askari, Joint Chief (International Cooperation) at the Tariff Commission, warned of growing trade policy uncertainties.

"Global LDC exports account for only 1.2 per cent of total trade," he said.

Mr Askari pointed to the United States Trade Representative (USTR) report that emphasised non-tariff issues including trade facilitation, subsidies, intellectual property rights, and technical barriers.

“Our export market remains highly concentrated and costly, and trade facilitation could significantly reduce business costs,” he said.

He also expressed concerns over Bangladesh's preparedness for LDC graduation.

“WTO non-compliance issues must be resolved to attract investors,” said Askari, calling for swift implementation of the National Tariff Policy 2023 to address tariff anomalies.

Shams Mahmud, former President of Dhaka Chamber of Commerce and Industry (DCCI), said that Bangladesh might benefit from the shifting of Chinese factories due to the US-China trade tension.

However, he also cautioned that fake products, unregulated digital markets, and undercutting among local firms pose serious threats to sustainability.

Citing the example of Angola, which postponed its graduation due to economic stress, Mahmud argued that Bangladesh’s private sector remains underprepared, especially in adopting green energy and value-added production.

Bangladesh’s weak logistics and infrastructure systems were also flagged as critical bottlenecks.

“A 33 per cent hike in gas prices has further strained industries. Older factories are paying Tk 30 per unit, while new ones are charged Tk 40,” he said.

Yarn imports from India have become difficult due to procedural challenges, it hurts especially 850 SMEs lacking high banking relationships, he said.

He also criticised the slow automation of port operations and air cargo pricing policies, stating that inefficiencies lead to significant financial damage, with shipping delays costing up to $1.0 per kg in exports.

However, he also found a positivity in the US tariff.

“If reciprocal tariffs reduce fuel and commodity prices, it might ease inflationary pressure,” he said.

He also said that the existence of US cotton warehouses in Bangladesh provides certain comparative advantages for local manufacturers.

Dr Kazi Iqbal said that Bangladesh's long-standing relationship with Western buyers—especially in garments—will not dissolve overnight.

A reallocation in terms of imports might be held by the US, which should be tapped, he said.

He said Bangladesh lacks an industrial policy or clear roadmap for manufacturing industries.

India and Brazil have gone far ahead in the automobile industry.

"Bangladesh must eye on the automobile industry through appropriating a comprehensive industrial policy. We have to make our own engines," he said.

He also put emphasis on the bargaining power, domestic manufacturing capabilities, and comprehensive industrial planning to ensure resilience in a shifting global economy.​

 

[Saif]

US TARIFFS ON BANGLADESH: A call to action

THE United States has introduced a 37 per cent reciprocal tariff on Bangladeshi exports as part of a broader trade policy shift, significantly affecting the country’s apparel industry, which accounts for 80 per cent of Bangladesh’s export revenue.

www.newagebd.net

US TARIFFS ON BANGLADESH: A call to action
by Ziauddin Hyder 26 April, 2025, 00:00

Workers are engaged at sewing stations in an apparel factory at Savar, on the outskirts of Dhaka, on April 9. | Agence France-Presse/Munir uz Zaman

THE United States has introduced a 37 per cent reciprocal tariff on Bangladeshi exports as part of a broader trade policy shift, significantly affecting the country’s apparel industry, which accounts for 80 per cent of Bangladesh’s export revenue.

Reciprocal tariffs refer to trade policies where a country imposes tariffs on imports from another country. They are often used in trade disputes or negotiations to encourage fairer trade relations. The global trade arrangements under the World Trade Organisation, GATT does permit countermeasures where a country violates trade agreements or engages in unfair practices.

Countervailing duties are tariffs imposed on imported goods to counteract subsidies provided by the exporting country’s government. These duties aim to level the playing field by ensuring that domestic producers are not unfairly disadvantaged by foreign competitors who receive financial support to lower their prices. The World Trade Organisation regulates the use of countervailing duties, requiring an investigation to determine whether subsidies have harmed domestic industries before imposing these tariffs. The goal is to maintain fair competition and prevent subsidized imports from disrupting local markets.

There is a question as to whether the Trump tariffs are retaliatory measures or countervailing duties in a technical perspective. World Trade Organisation agreements specify that affected nations can impose countermeasures, including reciprocal tariffs, after receiving approval from the World Trade Organisation’s dispute settlement body. The Trump administration has not supported the World Trade Organisation, deeming it unfair. So, technically, they are saying that the tariffs are countervailing duties even though they call them reciprocal measures.

Computation basis

TO EXPLAIN this simply, the formula can be reduced to a simple quotient of goods trade deficit over goods trade exports. To explain this in numbers the US claims that Bangladesh charges America a 74 per cent tariff. It gets to this absurd number by dividing the 2024 $6.2 billion trade deficit with Bangladesh by the total $8.4 billion in exports to America: 6.2/8.4 = 0.738 = 74 per cent. It then takes 50 per cent of 74 per cent, ie 37 per cent tariff on Bangladesh.

This is not the correct way to calculate a countervailing duty. The relevant WTO agreement specifies measures for doing so. This requires a weighted average tariff rate based on the trade basket that also adjusts for non-tariff barriers. It seems that the Trump administration took a simplistic approach of looking at the country specific trade in goods deficit, rather than the complex formulae of the countervailing duty agreement.

Implications

THE higher tariffs will harm Bangladesh’s competitiveness compared with countries like India and Pakistan, which have lower additional tariffs. The US tariffs may prompt the United States to pressure Bangladesh to increase agricultural imports, potentially disrupting Bangladesh’s agricultural economy and threatening food security, rural livelihood and local production systems. Furthermore, banks in Bangladesh are likely to face credit-negative impacts because of the higher reliance on exports to the United States, potentially straining loan growth and hurting loan quality. Finally, the apparel sector may experience decreased exports and revenue due to the increased tariffs.

A call for action

SHORT-TERM measures include: (i) reviewing the tariff rates on major imports from the US products by reducing tariffs on certain intermediate goods such as scrap iron and raw cotton; imports from the United States should increase which will have a positive impact on our local industries and be viewed positively in trade negotiations; (ii) ensuring that apparel buyers do not undercut prices while the post-pause tariff system is being determined; (iii) providing support for industries affected by the tariffs such as the apparel sector if the new tariffs are implemented at the end of the three months’ pause period. Also, regular economic analyses need to be conducted to assess the impact of the tariffs and identify opportunities for growth and development.

As an immediate action, Bangladesh needs to engage in a close dialogue with Washington, especially with the legislative branch. For far too long, Bangladesh has been seen as a supplicant, rather than as an important, market for US goods and as a strategic partner. The basic premise for this was that Bangladesh is a massive market for wheat, corn and unrefined soya bean oil. In 2022, it was the second largest single country market for the latter. Global grain prices were low in 2024, especially wheat and corn. Thus, the acreage to be planted and the soya component are key decisions that were made in February as spring planting season came up.

According to Professor Yunus’s letter dated April 7, 2025, a high-level delegation met US officials to kick-start increased imports of agricultural goods. The goal was to arrange imports of about $2 billion in imports. With this, the trade deficit would become (6.2-2) $4.2 billion, resulting in a deemed tariff rate of 4.2/8.4 = 50 per cent. So, the reciprocal rate would be 25 per cent, lower than Vietnam, India and Pakistan. Unfortunately, no follow-up took place.

Medium term measures include:

— Allowing exchange rate markets to function to support competitiveness; do not lean against market pressures and burn up forex.

— Accelerating trade reforms, liberalising domestic trade regimes (including services), reconsidering non-tariff barriers and communicating about trade liberalisation moves not just on tariffs but also on non-tariff barriers. A deeper regional integration should be prioritised to create larger markets. The role of services trade, including the digital economy should be expanded. This risk of losing export markets should be used to improve export competitiveness by improving logistics and trade facilitation. Behind-the-border quality standards should be improved to ensure access to key markets.

— Explicitly seeking new export markets and products. The Covid pandemic highlighted the importance of supply chain diversification. The tariff shock has highlighted that demand-side diversification is also necessary. Therefore, countries should explicitly seek to diversify their export markets and products by entering into new bilateral/regional trade agreements (South Africa has already announced its intention to diversify its export markets, focusing on Asia, Europe, the Middle East, and within Africa). Diversifying export markets could involve more vigorous use of export promotion services and ‘smart industrial policy’ Whatever the steady state post-tariffs, growth requires the access to technology and scale economies that integration in the global economy offers.

— Complementing trade reforms with domestic investment climate reforms to raise productivity and strengthening forward and backward linkages and productivity spillovers between export firms and the rest of the economy. This would significantly impact productivity growth, create well-paying jobs and embed supply chains more deeply in the domestic market. Business deregulation and promoting competition are critical for ensuring that more firms and people can participate in the growth process.

Ziauddin Hyder, a former senior health, nutrition and population specialist, World Bank Group, is an adviser to the chairperson of the Bangladesh Nationalist Party.​

 

[Saif]

Bangladesh shouldn’t respond knee jerk reaction to US tariff measures: Debapriya

Bangladesh should not respond to the US reciprocal tariff move with a knee-jerk reaction rather view it as an opportunity. Dr. Debapriya Bhattacharya said this at a seminar in Dhaka on Saturday. Jointly organised by the Dhaka Chamber of Commerce and Industry (DCCI) and Business Initiative Leading

thefinancialexpress.com.bd

Bangladesh shouldn’t respond knee jerk reaction to US tariff measures: Debapriya
FE ONLINE DESK
Published :
May 17, 2025 15:16
Updated :
May 17, 2025 15:16

Bangladesh should not respond to the US reciprocal tariff move with a knee-jerk reaction rather view it as an opportunity.

Dr. Debapriya Bhattacharya said this at a seminar in Dhaka on Saturday.

Jointly organised by the Dhaka Chamber of Commerce and Industry (DCCI) and Business Initiative Leading Development (BUILD), Dr. Bhattacharya said that as the US focusses on China and Vietnam, Bangladesh has a window of opportunity—particularly in the garments sector.

He also said that beyond readymade garments, Bangladesh could tap into export opportunities in the leather and pharmaceutical sectors to strengthen its trade relationship with the US.

Commerce Secretary Mahbubur Rahman and International Chamber of Commerce Bangladesh (ICC Bangladesh) President Mahbubur Rahman spoke at the seminar as special guests.​

 

[Saif]

Trump tariff highlights the need for diversifying exports: special assistant to CA

He says this at a discussion organised by the International Business Forum of Bangladesh

www.thedailystar.net

Trump tariff highlights the need for diversifying exports: special assistant to CA
He says this at a discussion organised by the International Business Forum of Bangladesh

The Trump tariff serves as a wake‑up call for Bangladesh, said Anisuzzaman Chowdhury, special assistant to Chief Adviser Professor Muhammad Yunus.

"In the current circumstances, we must diversify our exports to meet this challenge and, at the same time, move toward value addition," he said at a discussion yesterday.

The International Business Forum of Bangladesh (IBFB) organised the discussion, styled "Revamping USA-Bangladesh Trade", at the IBFB office in the capital.

Recently, US President Donald Trump announced reciprocal tariffs and later suspended them for three months.

"International circumstances have changed, and we must build self-confidence while focusing on diversifying our export markets," Chowdhury said.

The government plans to establish a specialised trade negotiation body ahead of Bangladesh's graduation from least-developed country (LDC) status, he added.

M Humayun Kabir, former ambassador and vice-president of the Bangladesh Enterprise Institute, said there is a trust deficit in the United States toward Bangladesh when it comes to negotiations on such trade matters.

"We must work on how to build and sustain that trust," he said.

Zaidi Sattar, chairman of the Policy Research Institute of Bangladesh, in his keynote presentation, highlighted the importance of engaging with the USA to negotiate tariff reductions on key export items such as agricultural products and machinery.

He recommended focusing on low-revenue items and reducing tariffs on non-garment goods to help curb anti-export bias.

Bangladesh could benefit from trade diversification, particularly considering China's growing tariff burden, he said, adding that collaboration with international buyers is needed to share increased costs, stressing that Bangladesh's limited bargaining power makes flexible pricing arrangements essential.

Prof Mustafizur Rahman, distinguished fellow at the Centre for Policy Dialogue, said Bangladesh needs to strengthen its trade negotiation capacity.

He said signing a free trade agreement or preferential trade agreement with the United States is possible, but Bangladesh is still not ready for that.

Rahman also said that although US tariffs are described as reciprocal, in reality, they are irrational and one-sided.

He highlighted the importance of raising the tariff issue within the TICFA (Trade and Investment Cooperation Forum Agreement) platform but acknowledged that Bangladesh is not yet adequately prepared for such discussions.

Syed Ershad Ahmed, president of the American Chamber of Commerce in Bangladesh, said there are not only tariff barriers in Bangladesh but many non‑tariff barriers as well.

For example, he said that clearing imported goods from the customs department requires 17 signatures and takes 7 to 8 days.

"Although it takes a long time to clear cargo here, in Vietnam it takes less than a day. As a result, we're losing out in competition. In this situation, modernising the customs department is very essential," he said.

Lutfunnisa Saudia Khan, president of the IBFB, said the suspension of the Generalised System of Preferences (GSP) benefits, along with the rise of protectionist trade policies in recent years, has affected Bangladesh's competitiveness in vital sectors such as garments, leather, and light manufacturing.

The suspension of GSP has slowed export growth, hindered job creation, and dampened investor confidence.​