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

[Saif]

Tariff can be reduced by using US raw materials

The recently announced 20 per cent reciprocal tariff on Bangladeshi goods exported to the United States could be reduced further by using US raw materials, said business leader Mahmud Hasan Khan Babu...

www.newagebd.net

Tariff can be reduced by using US raw materials
BGMEA says
Staff Correspondent 03 August, 2025, 00:35

Bangladesh Garment Manufacturers and Exporters Association organises a press conference at the BGMEA Complex in the capital on Saturday to address the impact of US reciprocal tariff. | Press release

The recently announced 20 per cent reciprocal tariff on Bangladeshi goods exported to the United States could be reduced further by using US raw materials, said business leader Mahmud Hasan Khan Babu.

The president of the Bangladesh Garment Manufacturers and Exporters Association was addressing reporters during a press conference at the BGMEA Complex in the capital on Saturday, discussing the US reciprocal tariff.

‘According to the clause F of section 3 (pages 13 and 14) of the US Executive Order 14257 on reciprocal duty, if a product exported to the US contains 20 per cent or more US-origin contents (raw materials), the reciprocal tariff would not apply to that portion,’ he added.

For example, if an RMG item worth $100 contains 26 per cent US content, then the reciprocal tariff could only be imposed on the value of the remaining 74 per cent.

Babu said that if this provision could be utilised effectively, it would offer significant tariff relief for the exporters.

However, he said that the implementation process of this clause remains unclear.

‘It is not specified how this rule would be applied or through which mechanism. We need greater clarity on this from the US side,’ he added.

He also stated that they would discuss this with the US side and US Customs and Border Protection regarding the execution of this clause, including traceability, mechanisms, greater transparency, detailed guidance, and clarification.

He also stated that approximately 75 per cent of the readymade garment items exported to the US were made from cotton.

He also said that if they could obtain a tariff waiver, there would be no pressure to import more US cotton and synthetic fibres, as this, in turn, could bring the effective tariff down below 20 per cent.

He also said that the reduction in reciprocal tariff from 35 per cent to 20 per cent brought some relief for the Bangladeshi exporters.

‘However, we have no room for self-satisfaction as competitors like India, Vietnam, China, and Pakistan are unlikely to be idle. They will continue negotiations and lobbying, and at any point, their tariff rates may drop even further,’ he added.

‘The latest US executive order mentioned that trade or security agreement talks were still ongoing with several countries. Bangladesh must remain engaged in this diplomatic process,’ he said.

He also expressed concerns, saying that the buyers might now face additional financial pressure.

‘To purchase the same volume of goods, buyers would need to arrange for 20 per cent more capital,’ he noted, saying that if a buyer has that capacity, they would proceed, and if not, they might resort to bank loans.

And if they don’t qualify for loans, they could reduce the number of orders. That’s where the concern lies, he added.

Moreover, the additional duty burden could ultimately fall on the end consumers, and if consumers reduce their purchases in response to higher retail prices, that too could lead to a decline in order volumes.

‘However, we are hopeful the market won’t head in that direction. At least one full season will be needed to truly understand how this plays out,’ he added.

Responding a question from a journalist on who would bear the reciprocal tariff, he said that about 95 per cent of the RMG exports operate under the Free-on-Board model, where the buyer is responsible for all charges after shipment—including import duties.

‘So far, no buyer has explicitly said they won’t bear the cost of this new countervailing duty. Therefore, we are assuming they will cover it,’ he added.

However, he said that they don’t want to jump ahead and make assumptions, but if buyers wish to open a discussion, they are ready to engage.

He urged the government to provide sustained policy support to ensure the sector’s competitiveness concerning the NBR, customs, ports, and gas and electricity supply.

Members of the BGMEA board of directors were also present at the event.​

 

[Bilal9]

US trade adviser says Trump tariff rates unlikely to change​

Some trade ministers "want to talk more and see how they can work differently with US," says trade representative​

By AFP
August 03, 2025

US President Donald Trump gestures while boarding Air Force One to depart for New Jersey, at Joint Base Andrews, Maryland, US, August 1, 2025. — Reuters

New US tariff rates are "pretty much set" with little immediate room for negotiation, Donald Trump's trade adviser said in remarks aired Sunday, also defending the president's politically driven levies against Brazil.

Trump, who has wielded tariffs as a tool of American economic might, has set tariff rates for dozens of economies, including the European Union, at between 10% and 41% come August 7, his new hard deadline for the duties.

In a pre-taped interview broadcast Sunday on CBS's "Face the Nation," US Trade Representative Jamieson Greer said "the coming days" are not likely to see changes in the tariff rates.

Tariff rates are "pretty much set," U.S. trade representative Jamieson Greer says

"These tariff rates are pretty much set," Jamieson Greer said in an interview Friday with "Face the Nation with Margaret Brennan."

www.cbsnews.com

 

[Saif]

Reforms must for real competitiveness

Bangladesh's main export-oriented apparel industry cautiously welcomes the US decision lowering the steep reciprocal tariff on imports from Bangladesh-from 35 per cent to 20 per cent-as entrepreneurs in the sector now stress deep reforms for real market competitiveness. While this is a significant

thefinancialexpress.com.bd

Tariff relief a welcome break
Reforms must for real competitiveness

Jasim Uddin
Published :
Aug 03, 2025 09:33
Updated :
Aug 03, 2025 09:33

Bangladesh's main export-oriented apparel industry cautiously welcomes the US decision lowering the steep reciprocal tariff on imports from Bangladesh-from 35 per cent to 20 per cent-as entrepreneurs in the sector now stress deep reforms for real market competitiveness.

While this is a significant shift in trade diplomacy and potentially restores some competitiveness in the country's single -largest export market, industry leaders warn this is no time for complacency.

The revised tariff regime now places Bangladesh on a more level playing field with key competitors such as Vietnam (20 per cent), Indonesia (19 per cent), and Pakistan (19 per cent). It offers a fairer footing-but still falls short of ideal conditions, particularly when the total effective tariff, including base duties and charges, nears 36 per cent.

"We are relieved," says Shovon Islam, Managing Director of Sparrow Group, which exports products worth nearly $300 million annually-half of which goes to the United States. "But 20 per cent is still a heavy load. The effective tariff remains burdensome when all costs are considered."

Islam also underscores the urgency of structural reforms at home-citing inefficiencies in energy supply and port operations, corruption, and infrastructure. "Privatisation and export-friendly policies are crucial. We cannot expect tariffs alone to determine our future."

Mahmud Hasan Khan Babu, President of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), describes the development as "a relief" and credits the outcome to months of behind-the-scenes negotiations. "But the government must now fulfil the conditions agreed during those talks-particularly around customs procedures and import facilitation," he told The Financial Express.

Sharif Zahir, Managing Director of Ananta Apparel, with annual exports exceeding $465 million (around $170 million to the US), sees a broader vista of opportunity emerging. "China's apparel exports now face more than 34 per cent in tariffs. As sourcing shifts away from China, Bangladesh stands to gain-but we must scale up fast to seize the window," he said.

Zahir hints at a larger strategic trade alignment between Bangladesh and the US. "Whether it's LNG, aircraft, or agricultural commodities like corn and wheat-these purchases are not just transactions, they are part of a broader trade equation."

He also points to a unique incentive tied to U.S. cotton. "If buyers use at least 20-percent U.S. cotton, they qualify for duty waivers. This creates a new incentive for U.S. brands to source from Bangladesh using American raw materials," Zahir added.

The decision is also applauded by Fazlee Shamim Ehsan, CEO of Fatullah Apparel Ltd. "Tariffs in the 19-20-percent range ensure we remain globally competitive. But there may be short-term bumps-retail prices could rise, and buyers might try to squeeze prices. We must invest in local value addition and production capacity," he says.

Ehsan points to a critical gap in the supply chain. "Most of our inputs still come from China and India. In product segments like sneakers and sportswear, local value addition remains minimal." He has called for more accessible export finance and robust industrial incentives from Bangladesh Bank.

BTMA President Showkat Aziz Russell, speaking from the US, where he was part of the negotiating delegation, credited BTMA Adviser SK Bashir Uddin for playing a pivotal role in the talks. "Bashir pushed for a 75-percent narrowing of our trade deficit with the US-an unprecedented and bold stance in bilateral negotiations," he said.

"No other country has made such assertive demands of the US. This gives Bangladesh a unique position going forward," Russell added, hinting at potential future breakthroughs.

Mohiuddin Rubel, Additional Managing Director of Denim Expert Ltd and former BGMEA Director, terms the decision "strategically important." With India and China now facing higher tariff barriers, Bangladesh is relatively better placed. "Yes, retail prices may rise temporarily in the U.S., but our industry has already demonstrated resilience through COVID-19 and global inflation shocks."

However, Rubel cautions that domestic political and economic stability is essential to sustaining investor confidence and buyer commitment. "That is the key to long-term competitiveness," he stresses.

From a broader geopolitical perspective, BGMEA Director Faisal Samad has highlighted the significance of the original tariff hike in April by US President Donald Trump. "That moment was a game changer-it altered the global trade narrative. Governments scrambled. Our initial response may have been slow, but it eventually delivered results," he says.

Samad urges the industry and government to now focus on three priorities: renegotiating prices with buyers, managing production costs, and identifying new growth opportunities. "This is not the time to sit back and celebrate. China is already adjusting its strategy-they won't stay idle for long."

He also called for the formation of a national coalition-bringing together academia, policymakers, civil society, labour representatives, and trade bodies. "If we can articulate our national trade position collectively, this could be a turning point for Bangladesh."

Echoing these sentiments, Mohammad Hatem, President of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), called the 20-percent tariff a "win-win" outcome. He praised the negotiating team, led by the Trade Adviser, for their relentless efforts. While the initial hope was for a lower rate, Hatem believes that securing a reduction from the proposed 35 per cent represents a strategic success.

With Vietnam and India facing tariffs of 20 per cent and 25 per cent respectively, Bangladesh now occupies a relatively advantageous position. But Hatem warns that the situation remains volatile. "President Trump could make further announcements anytime-altering India's tariff rate or changing Vietnam's trade status. We must stay alert and proactive," he says.

He also urges exporters to remain firm so that buyers do not try to pass the cost of tariffs onto manufacturers. "There is no reason for panic. Tariffs have risen for everyone. And right now, buyers do not have any viable alternatives to Bangladesh," he notes.

Hatem points to China's declining export volumes as an opportunity for Bangladesh and India to step in. "Vietnam may struggle due to its dependency on Chinese inputs. Combined tariffs on Chinese-origin goods could reach up to 64 per cent-buyers will definitely look elsewhere."

He urges the Commerce Adviser to advocate for duty-free access for garments made with U.S. raw materials in future negotiations. "This would deepen bilateral ties and further benefit Bangladesh's textile sector, which already relies heavily on U.S. cotton."

However, Hatem cautions that several domestic challenges could hinder progress. These include persistent gas and electricity shortages, instability in the banking sector, and a fragile financial system.

"If we fail to address these problems-especially the energy crisis and policy instability-Bangladesh will miss the opportunity to capture orders shifting out of China," he alerts. "Much of this crisis has been caused by flawed monetary policy by Bangladesh Bank over the past two years, which has severely disrupted industrial output."

Hatem has called for urgent, targeted policy reforms. "Without a strong and supportive policy environment, we will not be able to fully capitalise on the emerging opportunities in global trade."​

 

[Saif]

Productivity increase key to weathering tariff storm

The recent reduction of the US reciprocal tariff on products imported from Bangladesh - from a previously declared 35 per cent to 20 per cent - has come as a much-needed relief for stakeholders in the Ready-Made Garment (RMG) industry. This development follows a flurry of diplomatic negotiations an

thefinancialexpress.com.bd

Productivity increase key to weathering tariff storm

Atiqul Kabir Tuhin
Published :
Aug 07, 2025 00:00
Updated :
Aug 07, 2025 00:41

The recent reduction of the US reciprocal tariff on products imported from Bangladesh - from a previously declared 35 per cent to 20 per cent - has come as a much-needed relief for stakeholders in the Ready-Made Garment (RMG) industry. This development follows a flurry of diplomatic negotiations and concessions by Bangladesh, including increased imports from the US and a broad reduction in tariffs on US goods entering the country.

This tariff relief places Bangladesh's RMG sector, responsible for approximately 84 per cent of the country's export earnings and for which the US is the single largest export destination, on a more level playing field with key competitors like Vietnam and Sri Lanka, which are subject to the same 20 per cent rate. In contrast, larger economies like India and China face tariffs of 25 per cent or more. Although some countries, such as Cambodia and Pakistan, have negotiated a slightly lower tariff of 19 per cent, Bangladesh's strong production capacity and well-established supply chains are expected to help offset this marginal difference.

In this context, RMG entrepreneurs can be cautiously optimistic about sustaining export growth to the US and capitalising on opportunities arising from supply chain shifts away from China. However, optimism must be tempered with realism, as several challenges persist, both international and domestic.

One of the most immediate concerns is cost burden. While US importers are officially expected to bear the increased tariffs and pass them on to consumers, inflationary pressures in the US may reduce demand for imported garments. Reports suggest that American buyers are already requesting Bangladeshi manufacturers to absorb a portion of the cost. This is a significant concern, given that many local manufacturers already operate with razor-thin profit margins. Further pressure on those margins could ultimately affect the industry's most vulnerable segment - the low-paid garment workers.

Adding to these pressures are two recent domestic policy decisions that threaten to inflate logistical costs. The interim government's decision to increase charges at Chattogram Port by 40 per cent, along with a hike in fees at private inland container depots (ICDs) ranging from 30 to 100 per cent, risks further eroding the sector's competitiveness. At a time when global apparel markets are undergoing rapid transformation, such decisions could place Bangladesh at a disadvantage relative to regional competitors.

Another structural weakness is the RMG sector's heavy dependence on imported raw materials. Bangladesh's limited import substitution capacity leaves it vulnerable to the Rules of Origin (RoO) clause in the US tariff regime. This clause rewards manufacturers using US-origin inputs, but penalises those sourcing raw materials - such as fabrics and yarns - from third countries like China. The solution lies in long-term investments in backward linkage industries to reduce reliance on imports and develop domestic input sources.

The benefits from reduced tariffs will ultimately depend on how efficiently Bangladesh's industries can respond. While the country enjoys the advantage of low-cost labour, many factories' competitiveness is compromised by low hourly productivity and insufficient production capacity. However, there are signs of progress. Some factories have already increased output significantly by adopting modern Italian and Taiwanese machinery, leading not only to higher efficiency but also better pricing on select products. If this trend continues, and more units adopt smart technologies, production costs may fall and profit margins could rise.

To ensure sustainable growth, experts think that the RMG sector must focus on five key areas: strengthening backward integration; manufacturing more value-added products, particularly those based on man-made fibres (MMF); improving workforce skills and productivity; adopting advanced technologies in line with Industry 4.0; and enhancing sustainability to improve ESG scores. Bangladesh's globally recognised green factories and LEED-certified units offer a strong foundation in this regard.

Despite remarkable progress over the last few decades, the industry is still largely dependent on exporting some basic cotton items. In recent years, the global fashion landscape has undergone a dramatic shift, with the reign of cotton fading and MMF taking center stage. While cotton initially fuelled the surge of the Bangladesh apparel market, that seems now to have reached its peak and its growth potential appears limited. This echoes the global trend in fibre demand, where the cotton-to-MMF ratio has shifted from 75:25 thirty years ago to a stark 25:75 today.

This strategic change underscores the growing significance of apparel made from artificial fabrics in the global market. In spite of the seismic shift in fibre demand, with non-cotton fibre accounting for 75 per cent of garments manufactured globally, Bangladesh still relies on cotton fibers to make 71 per cent of the country's export-oriented products.

A recent study conducted by Wazir Advisors Pvt Ltd. suggests that the expansion of non-cotton garment exports holds immense potential for the country's economy. According to the study, conducted under the patronage of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Bangladesh has the potential to increase its non-cotton garment exports from the current $15.6 billion to an impressive $46 billion annually by 2032, if entrepreneurs were to invest $18 billion to enhance manufacturing capacity and a fully integrated value chain.

If Bangladesh can act decisively to produce high-end products and bridge technological gaps to boost productivity and lower production costs, there is hope that the economy can not only withstand the impact of higher US tariffs but also emerge stronger.​

 

[Saif]

US tariffs on India and China can open doors for Bangladeshi exporters

Bangladesh is emerging as a preferred destination for global apparel buyers as new US tariffs impose a significant competitive disadvantage on its main rivals, India and China. With the Trump administration levying an additional 25 percent tariff on Indian and 30 percent on Chinese goods, buyers a

thefinancialexpress.com.bd

US tariffs on India and China can open doors for Bangladeshi exporters

Published :
Aug 07, 2025 21:58
Updated :
Aug 07, 2025 21:58

Bangladesh is emerging as a preferred destination for global apparel buyers as new US tariffs impose a significant competitive disadvantage on its main rivals, India and China.

With the Trump administration levying an additional 25 percent tariff on Indian and 30 percent on Chinese goods, buyers are increasingly turning to Bangladesh, which faces a comparatively lower 20 percent tariff on its products, reports UNB.

The shift in global trade dynamics presents a rare opportunity for Bangladesh’s ready-made garment (RMG) sector. Apparel exporters believe the country has the capacity and expertise to meet the new demand.

The BGMEA President Mahmud Hasan Khan stated that Bangladesh is fully capable of handling a diversion of orders from India and China, assuring there will be “no problem to meet the additional supply demand.”

Leaders of Bangladesh’s textile industry have expressed confidence in their ability to seize this opportunity.

Muhammad Hatem, President of the BKMEA, affirmed, “We have enough preparation to increase supply as per the demand of US and other buyers.”

He highlighted that lower production costs and tariffs in Bangladesh make it an attractive alternative.

In a move to strengthen trade ties with the US, the Bangladesh Textile Mills Association (BTMA) announced plans to increase its cotton imports from the United States to $1 billion. This decision, disclosed in a press release yesterday, comes after recent trade negotiations secured a tariff reduction for Bangladeshi goods from 35 percent to 20 percent.

Market analysts are optimistic but also cautious. While the new tariffs are a “major commercial blow to India,” they warn that this window of opportunity is not permanent. They urge Bangladesh to act quickly with a concrete roadmap and public-private partnerships to solidify its position.

Mohiuddin Rubel, a former director of the BGMEA, echoed this sentiment, stating, “This new tariff policy opens up immense possibilities for Bangladesh. I believe our export sector is now better positioned than ever before.” He noted that India had previously benefited from a decline in China’s market share, but the new policy could reverse that trend.

India’s Market Share at Risk:

The increased tariffs pose a significant challenge for India’s apparel exports to the US, which had seen a 55.34 percent growth from $3.02 billion in 2020 to $4.70 billion in 2024. Analysts predict that the new 50 percent tariff (25 percent retaliatory plus 25 percent for importing Russian oil) will severely undercut India’s competitive pricing, leading to substantial market share loss.

The strained relationship between the US and India is rooted in trade disputes over issues like genetically modified foods and agricultural policies. The new tariffs, alongside existing trade agreements between the US and other nations, have made competition increasingly difficult for India.

To fully capitalize on this opportunity, experts emphasize that Bangladesh must focus on maintaining high quality, timely delivery, competitive pricing, and political stability. These factors will be critical for accelerating its market penetration in the US and establishing itself as a dominant exporter in South Asia.

The strained relationship between the US and India is rooted in trade disputes over issues like genetically modified foods and agricultural policies. The new tariffs, alongside existing trade agreements between the US and other nations, have made competition increasingly difficult for India.​

 

[Saif]

Bangladesh must tread carefully as new tariffs kick in

The country is under pressure amid escalating global trade tensions

www.thedailystar.net

Bangladesh must tread carefully as new tariffs kick in

VISUAL: STAR

A new and more perilous chapter in global trade has begun. With the imposition of a 20 percent tariff by the United States, the total duty levied on Bangladesh's vital garment sector now climbs to a punishing 36.5 percent. Our largest export market has suddenly become a far more expensive arena. This is not an isolated squall but part of a much larger storm. The immediate impact is as sharp as it is severe. Exporters face intense pressure from US buyers to absorb the new costs within their already razor-thin profit margins. The very competitiveness of our ready-made garments is at stake.

Yet this moment of crisis is also a test of the nation's resilience and an opportunity for the manufacturing sector to reaffirm its strength. The government and industry leaders believe Bangladesh can weather this, leveraging a hard-won reputation for bulk and timely delivery. The path forward, however, cannot be one of passive hope. It demands a steady hand. The government must continue its diplomatic engagement with Washington, aiming for further negotiations to mitigate this tariff burden.

President Donald Trump's trade decisions pushed American import duties to their highest level in a century, as a new, more contentious era of trade rivalry is playing out. The increases were implemented despite frantic, last-minute lobbying by various countries desperate to escape the levies. In a punitive action against New Delhi's continued purchases of crude oil from Moscow, the US president has now hit India with an additional 25 percent tariff. This comes on top of an existing 25 percent duty imposed after the two nations failed to reach a trade deal before the August 1 deadline—bringing the total tariff on Indian goods to a staggering 50 percent. Whether this new tariff landscape will create a competitive opening for Dhaka remains to be seen.

For Bangladesh, a strategic pivot is essential. Manufacturers must aggressively pursue the diversification of export markets, as the vulnerability of over-reliance on a single trading partner has now been laid bare. This external push must be matched by internal fortification: we must strengthen the industry's backward linkages as an economic necessity. The government, in turn, must encourage and incentivise innovation. The goal must be to help manufacturers move relentlessly up the value chain, from basic apparel to more complex and higher-margin products. In this new global marketplace, it is also time to champion our commitment to sustainable and ethical manufacturing.

The winds of global trade have shifted, perhaps irrevocably. Navigating this new landscape calls for Bangladesh to be both careful and strategic. Our future prosperity depends on it.​

 

[Bilal9]

Commerce Advisor Sk Bashir proved his mettle: Energy Adviser

Commerce Advisor Sk Bashir Uddin proved his mettle over successful US tariff negotiations, Energy Adviser Fouzul Kabir Khan said on Friday.

en.prothomalo.com

Commerce Advisor Sk Bashir proved his mettle: Energy Adviser
Staff Correspondent Dhaka
Updated: 01 Aug 2025, 18: 12

View attachment 20968
Advisers Muhammad Fouzul Kabir (L) and Sk Bashiruddin

Commerce Advisor Sk Bashir Uddin has proved his mettle over successful tariff negotiations with the US, Adviser to the Ministry of Power Energy and Mineral Resources Muhammad Fouzul Kabir Khan said on Friday.

In a Facebook post of Friday afternoon, Fouzul Kabir said, “From domestic price stability to successful tariff negotiations with the US, he (Sk Bashir Unddin) has proved his mettle, to the dismay of naysayers.”

He called Sk Bashir Uddin as ”our extraordinary Commerce Advisor.”

Fouzul Kabir said, “I was tasked by the CA (Chief Adviser) to meet Sheikh Bashiruddin, among others, for the possible position of Commerce Advisor. I caught him on phone in Bhola, where he was on a business trip. We met at my office at the Ministry of Power Energy and Mineral Resources.

“Without any previous acquaintance, we chatted for an hour. He politely declined the snacks my office offered him! What I liked about him is his patriotism, no-nonsense stubbornness, and clarity in organizing a mass of facts for analysis. I conveyed my impressions about him to the CA. Thankfully, for our nation, the CA offered and he accepted the position,” he added.

“May Allah give him Hayate Taiyeba to serve the nation, be it in the public or private sector,” Fouzul Kabir concluded.

On 2 April, US President Donald Trump imposed reciprocal tariffs on countries from which the US imports goods. Fifty seven countries were slapped with increased tariffs at varying rates with Bangladesh facing an additional tariff of 37 per cent.

View attachment 20969
Muhammad Fouzul Kabir Khan

After a three-month suspension of this decision, President Trump informed the Chief Adviser of the interim government in a letter on 8 July that the reciprocal tariff for Bangladesh would be 35 per cent, effective from 1 August.

To reduce the reciprocal tariff imposed by the US administration, Commerce Advisor Sk Bashir Uddin led final negotiations in Washington with officials from the Office of the United States Trade Representative (USTR).

Finally, President Donald Trump issued an executive order on Thursday (US local time), imposing a 20 per cent reciprocal tariff on goods imported from Bangladesh. In the same order, he imposed reciprocal tariffs on several dozen other countries as well.​

I have to echo the praise given by Fouzul Kabir bhai for Sheikh Bashir bhai, though both are equally great advisers.

Sheikh Bashir bhai is an asset to our interim govt. and though not a dyed-in-the-wool corrupt politician (Thank Allah!) he is supremely capable business person and superbly positioned for a cabinet post in the next govt.

To say that he has proved his mettle as a tariff negotiator is an understatement, and if you listen to him talk, you will see that his literary talents especially for Bangla and Sanskrit (also for English) are also wayyyy above average.

He runs a tight ship at AkijBashir Group and is Thankfully an incorruptible individual. His company is at the cutting edge of technology, employing robotics and automation for all products. Wish him Nek Hayat and may he live long and prosper.

 

[Saif]

How dicey is the Trump tariff deal?

The announcement of a 20 per cent reciprocal tariff on all imports from Bangladesh by Donald Trump, the president of the United States (US), has brought a palpable sense of relief in Bangladesh. This announcement, made on July 31, set new reciprocal tariffs on 70 countries, including Bangladesh. Th

thefinancialexpress.com.bd

How dicey is the Trump tariff deal?

Asjadul Kibria
Published :
Aug 09, 2025 22:43
Updated :
Aug 09, 2025 22:43

The announcement of a 20 per cent reciprocal tariff on all imports from Bangladesh by Donald Trump, the president of the United States (US), has brought a palpable sense of relief in Bangladesh. This announcement, made on July 31, set new reciprocal tariffs on 70 countries, including Bangladesh. The tariff rates on these countries range between 10 per cent and 71 per cent and came into effect last Thursday.

Earlier on July 8, the US president proposed 35 per cent reciprocal tariff on Bangladesh but suspended the same for three weeks to give room for negotiation. During the period, the official trade delegation of Bangladesh rushed to Washington to negotiate with the USTR officials and reach a deal with the Trump administration reducing the reciprocal tariff to a reasonable rate. It is to be noted that Trump first announced a 37.50 per cent reciprocal tariff on Bangladesh on April 2 this year, when he also imposed different rates of tariff on more than 100 countries along with a 10 per cent universal tariff. Soon, responding to requests from different trade partners, he suspended levying of the proposed tariffs for 90 days, literally asking them to make a deal individually with the US to get tariff reduction. Dr Muhammad Yunus, chief adviser of the interim government, in a letter to Trump, also requested him to provide a three-month time before finalising the tariff.

Nevertheless, three months is not enough at all for a country like Bangladesh to negotiate a reasonable trade deal or free trade agreement (FTA) with the world's most powerful nation. The structure of the US FTA with any-country goes beyond trade in goods and services. It extensively covers investment, intellectual property rights and standards of labour and environment. The US believes in 'deep integration' and so full liberalisation of goods and services is an inherent component of any bilateral (BFTA) with the US. Moreover, the BFTA goes beyond the obligation of multilateral Intellectual Property Rights (IPRs) or Trade Related Aspects of Intellectual Property Rights (TRIPS) of the World Trade Organization (WTO). The US also stresses investment protection as embodied in the FTA, mainly for the protection of the interests of the US-based Multi-National Entities (MNEs). There are also provisions for environment and labour standards, and any BFTA with the US can't be complete without the inclusion of these two components. Thus, a BFTA with the US is actually a comprehensive agreement that supports economic and even political reforms in the partner countries. This is the reason why very few countries sign any BFTA with the US. So far, only 20 nations have signed BFTA with the US.

After becoming the president of the US in 2016, Trump put stress on reaching BFTA with the trading partners and asked them to negotiate bilaterally instead of multilaterally under the umbrella of the WTO. But during the four years of his first term, no country signed any BFTA mainly due to the complex structure and time-consuming negotiation. In his current term, Trump has virtually abandoned the practice of prolonged negotiation and started to use tariffs as the main tool to compel other countries to sign trade agreements with the US. It seems that tariffs as a weapon are working, as a number of trading partners have agreed to sign bilateral deals to avoid excessive tariffs.

The Bangladesh delegation, led by the commerce adviser, demonstrated unwavering determination and hard work in convincing the Trump administration to agree to a lower tariff on Bangladesh. In exchange, they agreed to a set of conditions, offering trade and non-trade benefits to the US, along with almost zero tariffs to almost all the products importable from that country. Though the details of the negotiated deal are yet to be unveiled formally, it is learnt from the media that Bangladesh is likely to purchase 25 aeroplanes from Boeing, the US aviation giant, along with an increase in imports of wheat, edible oil, crude fuel oil, cotton and military equipment. The country is also likely to sign a number of international agreements on IP rights and address the US concern on data protection act. Finding no other alternative within such a short period of time, it appears Bangladesh has mostly aligned with the US FTA structure. One, however, needs to look into the past before making any final comment on the latest development.

Twelve years ago, the Obama administration suspended the GSP Generalised System of Preference (GSP) facility due to the Rana Plaza tragedy that claimed more than 1,100 lives of garment workers. Thus, the US gave a message to Bangladesh that prompted the country to sign the Trade and Investment Cooperation Forum Agreement (TICFA) in the same year. As GSP covered only one per cent of the total exports to the US, policymakers did not put much effort into restoring the facility. Instead, discussion on signing a BFTA with the US gained momentum. It had also paused for two reasons. First, Bangladesh did not sign any FTA with any country, let alone with a big trade partner. Second, the gradual deterioration of the relationship between the now ousted Hasina regime and the US. If the policymakers put some serious effort into advancing a bilateral trade deal with the US at that time, instead of putting much effort into graduation from the Least Developed Country (LDC) status, Bangladesh might be in a better position today in dealing with Trump's tariffs.

A big question now is whether Trump will stick to the 20 per cent tariff on Bangladesh. What will happen if he suddenly shifts his position even before signing the bilateral reciprocal trade agreement? Or even after signing the agreement? The answer is unknown as it is not possible to rule out such a possibility. Trump has already proved it by increasing the 25 per cent tariff on India to 50 per cent within 24 hours. He also asked India to stop purchasing oil from Russia or face the higher tariff on certain products, including textiles and clothing, after August 21. This is good news for Bangladesh as the country's clothing exports will face less competition with India in the US market at least for some time in the near future. Indian apparel exporters fear that many US buyers would move to Bangladesh and Vietnam because of higher tariff.​

 

[Saif]

Trump tariffs: Bangladesh-US trade relations

On July 31, US President Donald Trump issued an executive order imposing tariffs on almost all US trading partners. His actions represent a departure from the open liberal trading system established after World War II under the auspices of the General Agreement on Tariffs and Trade (GATT), later ad

thefinancialexpress.com.bd

Trump tariffs: Bangladesh-US trade relations

Muhammad Mahmood
Published :
Aug 09, 2025 22:33
Updated :
Aug 09, 2025 22:33

On July 31, US President Donald Trump issued an executive order imposing tariffs on almost all US trading partners. His actions represent a departure from the open liberal trading system established after World War II under the auspices of the General Agreement on Tariffs and Trade (GATT), later adopted by the World Trade Organization (WTO). The post-war global trading system was established with an emphasis on reducing tariff and non-tariff barriers. The regime aimed to boost economic growth and prevent a repeat of the 1930s trade wars that preceded WWII.

Trump's trade wars will create an environment of uncertainty and that is always bad for trade. His protectionist tariff policies would cause economic growth around the world to slow down. More alarmingly, this US tariff measures could rival those of Smoot-Hawley measures of the 1930s that led to a global trade war, thus creating the conditions for the WWII.

As for Bangladesh, bilateral trade with the US is increasing, with the U.S. being a major export market for Bangladesh, particularly for ready-made garments (RMG). Despite uncertainty created by Trump tariffs, Bangladesh recorded a significant boost (25.13 per cent) in RMG exports to the US in the first half of this year both in terms of value and volume (FE, August 7). Bangladesh also runs trade surpluses with the US. The U.S. is also a significant investor in Bangladesh, especially in the energy sector. Recent export performance was likely driven by US importers making advance purchases to avoid upcoming Trump tariffs.

As the deadline approached for the next phase of Trump tariffs, the US was set to impose a 35 per cent tariff on exports from Bangladesh, down from 37 per cent that was indicated in April. This proposed rate was still more than double the rate Bangladeshi exports faced in the US market. This proposed tariff on Bangladesh exports to the US which are primarily composed of RMG could have serious consequences. RMG accounts for about 80 per cent total exports from the country. In fact, the proposed tariff rate could completely wipe out its price competitiveness over its regional rivals. This is the only competitive advantage Bangladesh has in RMG exports.

Up until "reciprocal tariffs" (RT) were introduced, Bangladeshi exports faced an average tariff of about 15.7 per cent. When the new tariff eventually comes into effect, the average tariff rate could jump to about 50 per cent. In 2024, Bangladesh exported goods worth nearly US$8.4 billion to the US, of which US$7.34 billion were RMG. The RMG industry contributed 8 per cent to the country's GDP in 2024-25.

Over four million people are employed in the RMG industry in Bangladesh, with the majority being women. Many of these workers rely on regular wages to meet their expenses and are experiencing rising job insecurity. The Trump tariffs could force factory closures ?and workers being laid off, as such the stakes are not only?economic but also existential.

In fact, the impact of Trump tariffs goes far beyond the RMG industry and the people directly and indirectly associated with it. The flow on effects of any declining export earnings will negatively impact macroeconomic stability of the country, and further exacerbate the balance of payments crisis.

But Bangladesh remains the most protected economy in the South Asian region and relatively tariff protected compared to other countries in the world, with a significant portion of its tariff lines not bound, meaning the government has the flexibility to raise applied tariff rates. This practice of trade mercantilism also creates uncertainty in market access for manufactured goods. Currently, the average nominal tariff rate for imports into Bangladesh stands at 28 per cent and the total tax incidence (that includes the burden of all taxes importers pay) is 54 per cent.

There are several taxes that are imposed on imports in Bangladesh, such as Customs Duty (CD) Value Added Tax (VAT), Supplementary Duty (SD), Regulatory Duty (RD) Advance Income Tax (AIT) and Advance Trade VAT (ATV). Tariffs (CD). These constitute a significant source of government revenue, which greatly complicates efforts to lower tariff rates.

Following the announcement of the 35 per cent tariff decision by the US, a Bangladeshi trade delegation travelled to Washington to renegotiate the trade deal. It remains a mystery what they have been doing during the three months tariff pause period.

Bangladesh is one of the most protected economies globally and had a US$6.2 billion trade surplus with the US in 2024. Therefore, Bangladesh does not have much of a negotiating or bargaining leverage with the US. Additionally, Bangladeshi goods, particularly its main exports such as RMG, can be replaced by US importers from other countries.

Bangladesh is already experiencing a difficult political and economic situation. The RMG industry that grew and expanded under the current trade and industry regime, is charaterised by structural inability to explore markets beyond primarily to the US and then to a few west European countries. The primary factor associated with the structural rigidity is the country's limited exposure to international competition.The problem worsens when a corrupt, inefficient bureaucracy controls the economic policy making process.

If Bangladesh continues to focus on RMG exports instead of shifting to a competitive diversified manufacturing base, the industry will need to adopt new technologies and innovate to maintain its position in the global apparel market. Now the future of the RMG industry depends on robotics and AI technologies which will begin to reshape the RMG industry as has happened in most other industries already.

Despite odds against Bangladesh's negotiating position, the Bangladesh trade delegation has been successful in bringing down the tariff rate to 20 per cent. The negotiated rate is similar to those of Bangladesh's major competitors in the US apparel market, including Vietnam, Sri Lanka, and Pakistan.

India, however, failing to reach a comprehensive trade agreement with US will face 25 per cent plus penalties for its economic ties with Russia. On August 6, Trump imposed an additional 25 per cent tariff on Indian good raising the rate to 50 per cent. Since the start of the Russia-Ukraine conflict, India has emerged as the second largest buyer of Russian oil after China, purchasing US$133.4 billion worth of oil last year, compared to minimal imports prior to the Russia-Ukraine conflict. Trump claims that India is making money from Russian oil by reexporting refined Russian oil to countries like US ally Australia and others. Australia purchased US$6.2 billion of oil from India last year, largely sourced from Russia.

To add insult to the injury, Trump also said Moscow and New Delhi "can take their dead economies down together, for all I care. We have done very little business with India, their tariffs are too high, among the highest in the world". But Trump is right on both counts that India is making big profits out of Russian oil and India is a dead economy. Indian remains a highly protected economy which has engendered a highly inefficient economy. As such India continues to face significant poverty over 80 years after gaining independence notwithstanding continuously in military and political conflicts with its all neighbouring countries. However, higher tariffs on Indian exports including clothing to the US will work in favour of Bangladesh.

The specifics of Bangladesh's offer to secure tariff concessions and reduce its trade surplus with the US remain crucial. Bangladesh has agreed to import 700,000 metric tons of wheat annually from the US for five years, as part of a wider effort to facilitate further trade talks with the US.

Bangladesh will also increase import of soybean oil and cotton from the US. Additionally, the Ministry of Commerce placed an order for 25 Boeing aircrafts. However, Biman, the national flag carrier, stated that it was not consulted regarding this procurement decision. This kind of decision-making is common in Bangladesh.

One of the objectives of Trump tariffs is to expand the market access for US agricultural products to bridge the trade gap. In fact, Bangladesh mostly imports agricultural products from the US among others. Not surprisingly the trade negotiation with the US to bridge the trade gap involved Bangladesh agreeing to import more agricultural products.

In 2023, the share of agriculture in Bangladesh's gross domestic product (GDP) was 11 per cent, but the sector is a significant employer, with approximately 45 per cent of the total labour force engaged in agricultural activities. The sector is beset with various challenges such as unsafe work environments, low wages, and long working hours.

Also, a high proportion of rural women are engaged in farm activities. Therefore, importation of highly subsidised US farm products like wheat and soybean could pose a threat to the livelihood of marginal to small farmers and farm labourers notwithstanding the impact on country's drive to attain food grain self-sufficiency.

Trump's attempt to address the issue of US$12 trillion trade deficit has more to do with macroeconomic factors than the unfair trade practices which he cites as the reason to wage a trade war on the rest of the world. Trump tariffs will raise a lot of revenue but that will be coming from US firms and consumers, and not from exporters to the US. This will drive up price levels affecting consumers, squeeze profit margins of US companies, slow down economic activity and damage relations with trading partners including allies.​

 

[Saif]

Dhaka-Washington tariff deal can be changed or cancelled by the next government: Adviser Khalilur

Bangladesh has negotiated an agreement with the US government with the provision that the next elected government could make required changes or cancel any, said National Security Adviser to the interim government Dr Khalilur Rahman. He said the negotiations, which are still going on, are based on

thefinancialexpress.com.bd

Dhaka-Washington tariff deal can be changed or cancelled by the next government: Adviser Khalilur

FE Online Report
Published :
Aug 11, 2025 00:11
Updated :
Aug 11, 2025 00:30

Bangladesh has negotiated an agreement with the US government with the provision that the next elected government could make required changes or cancel any, said National Security Adviser to the interim government Dr Khalilur Rahman.

He said the negotiations, which are still going on, are based on three principles.

"We are negotiating with President Trump's government an agreement that is revocable," he said while addressing the welcome reception programme by the Bangladesh Textile Mills Association (BTMA).

BTMA organised the welcome reception at Gulshan Club on Sunday in the city to congratulate the Bangladesh team led by Commerce Adviser Sk Bashir Uddin that successfully negotiated to reduce the reciprocal tariff to 20 per cent from 35 per cent.

"...We have negotiated on three principles," Mr Rahman said, explaining the first is that they are not an elected government and they are not going to obligate the next government.

"The next government must have the power to make changes, modifications, or cancel."

The second is that they take the responsibility they can fulfil, he said, adding that if they fail to meet any commitments, the US will cancel this agreement and charge Bangladesh 37 per cent tariffs.

"Third, this is a bilateral agreement. We cannot do this with any third country. We do not want to get into any geopolitical trap," he said.

He, however, hinted that the tariff might go down further for Bangladesh.

Speaking there, Commerce Adviser Sk Bashir Uddin said they committed to the US authorities that the trade deficit would be reduced by 75 per cent in a year.

He said if needed they will go to the US after two or three weeks, as the negotiation is still continuing.

The fascist government has left the legacy of a 'time-bound time bomb' in the name of LDC graduation, he said, terming it one of the major challenges.

"Next challenge is LDC graduation, which is bigger than Trump tariff," he said, calling on all businesses and stakeholders to sit together to devise an action plan to face the challenges with strong leadership.

Speaking there, BTMA president Showkat Aziz Russell said that following the successful negotiation with the United States regarding reciprocal tariffs, Bangladesh is now in a stronger position.

As a result, the country's exporters are receiving more inquiries from buyers, he said.

"We want to invest further... now is the high time to invest in the textile sector," he said.

BGMEA president Mahmud Hasan Khan and BKMEA president Mohammad Hatem, among others, spoke there.​