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

[Saif]

https://www.thedailystar.net/business/news/govt-prepares-formal-appeal-us-over-tariffs-3862996

Govt prepares formal appeal to US over tariffs

Photo: AFP

The government will shortly write to the United States Trade Representative (USTR), urging it to reduce what it describes as an irrational imposition of 37 percent reciprocal tariffs on Bangladeshi exports, a top official said yesterday.

The decision was taken at an urgent inter-ministerial meeting at the Secretariat within hours of US President Donald Trump's sweeping tariff announcement, according to Commerce Secretary Mahbubur Rahman.

Speaking to The Daily Star over the phone, he presented Bangladesh's rebuttal to the new US tariff measures.

"Our comprehensive analysis shows that American goods entering Bangladesh face an average tax incidence of merely 2.37 percent," the commerce secretary said.

"This minimal rate reflects our duty-free or near-zero tariff treatment to key US commodities including cotton, iron ore, soybean seeds and scrap metal. So, the imposition of such disproportionate reciprocal duties is not justified," Rahman said.

He added that the ministry has scheduled a high-priority meeting with Tracey Ann Jacobson, the chargé d'affaires at the US Embassy in Dhaka, on Sunday.

After the import tariff hike by the US on Wednesday, Shafiqul Alam, press secretary to the chief adviser, said that the authorities were evaluating options to adjust tariffs.

NBR Chairman Abdur Rahman Khan said revenue officials were examining which US products face duties, their respective rates, and their trade value.

Asked about Trump's claim that Bangladesh imposes a 74 percent tariff on American goods, the NBR chairman said they were verifying this figure.

"They may have cited only the highest-duty items. We are cross-checking the data," he added. "The US might have referenced either peak or average rates. We are now analysing the actual numbers."

Similarly, the commerce secretary identified several issues in the Trump administration's tariff methodology.

"Firstly, their calculations completely disregard Bangladesh's substantial imports of American services," he said.

"Secondly, they ignore the millions we pay annually in licensing fees to US technology firms and insurance providers. They have also excluded the digital service payments flowing to American platforms like Facebook, YouTube and Microsoft."

He told The Daily Star that the upcoming diplomatic engagement aims to formally communicate Bangladesh's objections.

While Rahman suggested the direct impact on Bangladesh's export volumes might prove manageable in the short term, there would be broader economic consequences.

"These measures will inevitably contribute to inflationary pressures that will reverberate through both our economies. American consumers will ultimately bear the cost through higher prices," he said.

Rahman added that President Trump himself indicated in his announcement that he remains open to bilateral negotiations with affected nations.

"We intend to pursue this opening vigorously and believe a more rational tariff adjustment can be achieved through constructive dialogue."

Commerce Adviser Sk Bashir Uddin, senior officials from the National Board of Revenue, representatives from major trade bodies, members of the Bangladesh Trade and Tariff Commission and policy specialists from various government agencies were present at the meeting.​

 

[Saif]

https://www.thedailystar.net/business/news/what-does-the-us-tariff-offensive-mean-bangladesh-3862526

What does the US tariff offensive mean for Bangladesh?

Shipping containers are stacked at the Port of Long Beach on March 4, 2025 in Long Beach, California. Photo: AFP

Bangladesh is set to come under fresh economic pressure as its exports to the United States are facing a 37 percent "reciprocal tariff" under the Trump administration's sweeping overhaul of global trade policy.

The measures mark President Donald Trump's most aggressive challenge yet to the post-World War II global trading order, drawing alarm from economists and industry leaders worldwide. Under the new plan, a minimum 10 percent tariff will apply to all US imports, while steeper, country-specific "reciprocal" tariffs will target around 60 nations, including Bangladesh. Previously, Bangladeshi goods entered the US market with an average duty of 15.62 percent.

"For countries like Bangladesh and other developing countries, this shift poses significant challenges, as they may face tougher economic conditions under such an uncertain regime," Professor Selim Raihan, executive director of the South Asian Network on Economic Modeling, wrote in a social media post.

Bangladesh's garment sector, a major export industry and critical employment source, is likely to bear the brunt of this policy. The United States has historically been a top export destination for Bangladeshi garments, and such a steep tariff could dramatically reduce competitiveness. The US accounts for 17-18 percent of Bangladesh's total global exports.

Bangladesh's exports to the US rose 1.1 percent year-on-year to $8.4 billion in 2024, driven largely by the country's dominant garment sector, according to USTR data. Bangladesh's imports from the US totalled $2.2 billion in 2024, a 1.5 percent decrease from the previous year. As a result, the US trade deficit with Bangladesh widened to $6.2 billion.

Raihan, who teaches economics at Dhaka University, highlighted the broader implications of the tariff measures. "The world has witnessed today an unprecedented shift in the global trading regime with the introduction of reciprocal tariffs by the Trump administration, signalling a potential end, or at least a significant transformation, of the Most Favoured Nation (MFN) principle that has long been a cornerstone of the GATT/WTO framework," he wrote.

The reciprocal tariff regime applies different rates to different countries and even product categories, making the global trading environment more fragmented and unpredictable. "This makes it increasingly difficult to determine the winners and losers among exporting countries in the US market, while contributing to a more volatile and unpredictable global trading environment," Raihan wrote.

On the eve of Trump's tariff announcement, major clothing retailers, including H&M, expressed concern. H&M CEO Daniel Erver noted that the tariffs will likely lead to increased prices for American consumers, signalling potential knock-on effects even within the US market.

The move is already roiling global markets and is expected to provoke retaliation from major trading partners, further destabilising an international trade system built on decades of lowering tariffs and reducing protectionism.

Experts agree that Bangladesh must respond strategically. Raihan stressed the need for proactive policymaking.

"To navigate this new landscape, Bangladesh must rethink its domestic trade policies, engage actively in the reformation of the global trade system, and enhance trade integration with key partners to secure its position in the evolving world trade order," he wrote.

Asian nations are in the line of fire. Vietnam is seeing a 46 percent tariff, White House documents showed. Other nations slapped with larger tariffs include Japan at 24 percent, South Korea at 25 percent, India at 26 percent, Cambodia at 49 percent and Taiwan at 32 percent.

China, the primary focus of Trump's trade agenda, will face a 34 percent reciprocal tariff, which stacks atop an existing 20 percent fentanyl-related duty and separate levies on categories like solar panels. That brings the effective tariff rate on many Chinese goods to well above 50 percent. Analysts at Bloomberg Economics warn this could result in up to a 90 percent decline in Chinese exports to the US by 2030.

During his 48-minute Rose Garden address, Trump underscored the aggressive nature of the policy by brandishing large visual boards displaying each nation's tariff rate, calling the measures overdue steps to rebalance global trade in favour of the United States.​

 

[Saif]

How will Trump's tariff impact Bangladesh?

 

[Saif]

https://www.thedailystar.net/opinion/editorial/news/take-steps-tackle-new-us-tariffs-3862876

Take steps to tackle new US tariffs
We must evolve with the changing global trade landscape

VISUAL: STAR

We are deeply concerned by US President Donald Trump's reciprocal tariff policy announced on April 2 against all trading partners of the US, including Bangladesh. The policy comes as a shock to the world and signals a shift from the decades-long established global trading pattern. Under the new policy, a base 10 percent tariff will be applied to all foreign goods in the US, while goods from many countries will face higher rates depending on their trade imbalances with the US.

Ironically, it was the US that was the prime mover of the idea of open and free trade by reducing trade barriers through the 1947 General Agreement on Tariffs and Trade (GATT) treaty, which later evolved into the World Trade Organization (WTO) with 166 member nations. But Trump's latest move is a complete reversal of the US's previous position and strikes at the core of globalisation as opposed to protectionism. The policy adds an extra layer of uncertainty to the already complex global trade economy, which has been hit by geopolitical tensions and lingering inflation.

As the world prepares for this new economic reality, Bangladesh must undertake measures to protect its interests. The 37 percent reciprocal tariff the US imposed on Bangladeshi exports will undoubtedly strike the RMG sector hard, as the US has historically been the top destination for our garment products. Last year, $8.4 billion worth of goods were exported to the US and only $2.2 billion were imported from the country, indicating a trade balance in our favour. While some of our main competitors, including China and Vietnam, face higher tariffs than we do, others, such as India, face lower tariffs, which may give them a built-in advantage. This raises concerns about losing the US RMG market to Indian competitors.

However, the government has already made a positive move by initiating a review of tariffs on goods imported from the US. A thorough re-examination of the trade relationship with the US and a re-assessment of the tariff structure, including the removal of tariffs on a select number of US goods, will hopefully send a positive signal to the Trump administration. Experts suggested offering lower tariff offers through the Trade and Investment Cooperation Forum Agreement (Ticfa) to open the doors for further negotiation. However, Bangladesh needs to gear up its negotiation skills and strategies and strengthen ties with key partners through bilateral and multilateral agreements to face the increasingly unpredictable global trade regime. In the long run, Bangladesh needs to diversify both its markets and products and increase efficiency and productivity to retain its competitiveness in the global market. Trump's tariff policy is undoubtedly a shock, but we must not shy away from employing creative and innovative strategies in handling this matter.​

 

[Bilal9]

Tariff weaponising by US, others concerning for Bangladesh: Rehman Sobhan

Economist Rehman Sobhan on Monday said that the world of liberalisation and globalisation was now in retreat amid weaponising the tariff by powerful nations, causing concerns for Bangladesh...

www.newagebd.net

Tariff weaponising by US, others concerning for Bangladesh: Rehman Sobhan
Staff Correspondent 25 February, 2025, 00:08

View attachment 14789
Rehman Sobhan

Economist Rehman Sobhan on Monday said that the world of liberalisation and globalisation was now in retreat amid weaponising the tariff by powerful nations, causing concerns for Bangladesh.

‘Now tariffs and a whole variety of other economic and trade sanctions are being used as political instruments by particular countries which are really the powerful ones,’ he said while taking part in the first day of a two-day conference on the ‘Recommendations by the task force on re-strategising the economy’ in the capital Dhaka.

Arranged by the Centre for Policy Dialogue and the 12-member task force, the inaugural session titled ‘Strategic policy realignment to boost investment and achieve export’ was, among others, participated by commerce adviser Sk Bashir Uddin and former commerce minister Amir Khosru Mahmud Chowdhury.

Moderated by task force chief KAS Murshid, keynotes were presented by task force members Selim Raihan and Mohammad A Razzaque at the session with calls for implementing the task force’s recommendations aiming at further trade liberalisation.

Rehman Sobhan, however, said that bilateral deals with countries from the European Union countries to the United States to China to India were going to determine the new trading regime that had to be dealt with carefully by Bangladesh.

He observed that the US might put a 30 per cent tariff on China before cutting it to 10 per cent on the back of political deal.

He said that reform proposals should be based on ability of the government bodies to operationalise and activate those.

While highlighting the major reform proposals of the task force, Murshid identified the lack of implementation capacity as a major problem.

He was surprised when the commerce adviser during his speech said he was yet to receive a copy of the task force report.

The task force, formed on September 10 past year, submitted strategies to boost the economy and mobilise resources for equitable and sustainable development on January 30.

The commerce adviser criticised the ousted Awami League regime, saying that every sector of the economy had been criminalised in the past decade.

‘Unnecessary projects and money laundering caused a significant damage to the country’s economy,’ he said, adding that manufacturing raw materials for the readymade garment sector could ensure the much needed diversification of the sector.

Amir Khosru Mahmud Chowdhury said that he supported liberalisation of trade policy and easing doing business without which Bangladesh could not go forward.

‘We will go for deregulation,’ he said adding that the economic diplomacy should be given priority.

Economist Mustafizur Rahman and Foreign Investors’ Chamber of Commerce and Industry president Zaved Akhtar, among others, took part in the discussion.​

Rehman Sobhan is an old-school Kolkata elite turned Dhaka bigwig.

I don't know if he is on RAW's payroll, but he definitely is a mover and shaker in Dhaka's influential circles and can pull strings in Dhaka.

 

[Bilal9]

"The National Board of Revenue is identifying options to rationalise tariffs expeditiously, which is necessary to address the matter," he wrote on a Facebook post this morning.

The NBR - being the corrupt idiots they are, have to wake from their long slumber and smell the "Vapa Pitha" (pancakes). They better abolish tariffs on US goods pronto....

 

[Saif]

undefined | The Financial Express

thefinancialexpress.com.bd

Chief adviser to discuss tariff issue with US administration: Commerce adviser
FE ONLINE DESK
Published :
Apr 05, 2025 21:38
Updated :
Apr 05, 2025 21:48

Commerce Adviser Sheikh Bashir Uddin has said Chief Adviser Professor Muhammad Yunus will discuss the tariff issue with the US administration.

The adviser gave the information at a press conference after an emergency meeting, convened by Chief Adviser Professor Muhammad Yunus, at the State Guest House Jamuna in Dhaka on Saturday evening.

He said the interim government will initiate efforts to reduce the trade gap by increasing the imports of some products, like soybean oil and cotton.

Meanwhile, Khalilur Rahman, high representative to the chief adviser, said there is nothing to be worried about the tariff imposed by the US.

Besides, the government has also remained engaged in discussions with US officials on the issue.​

 

[Saif]

The NBR - being the corrupt idiots they are, have to wake from their long slumber and smell the "Vapa Pitha" (pancakes). They better abolish tariffs on US goods pronto....

Currently, Bangladesh imposes 74% tariffs on the US goods.

 

[Saif]

Will soon take measures in consultation with US, nothing to be panicked: High Representative

Chief Adviser's High Representative Dr Khalilur Rahman on Saturday night said Bangladesh would soon take some measures in consultation with the US administration regarding the tariff issue, stressing that there is nothing to panic about. "We are prepared for this. We will soon take some measures.

thefinancialexpress.com.bd

Will soon take measures in consultation with US, nothing to be panicked: High Representative
UNB
Published :
Apr 05, 2025 23:57
Updated :
Apr 05, 2025 23:57

Chief Adviser's High Representative Dr Khalilur Rahman on Saturday night said Bangladesh would soon take some measures in consultation with the US administration regarding the tariff issue, stressing that there is nothing to panic about.

"We are prepared for this. We will soon take some measures. These measures will be taken in consultation with the US administration. There is nothing to fear or get panicked. We are fully prepared," he said.

The High Representative was talking to reporters at a media briefing after the emergency meeting convened by Chief Adviser Prof Muhammad Yunus at State Guest House Jamuna to discuss the US tariff issue.

Commerce Adviser Sk Bashir Uddin, Chief Adviser's Special Envoy Lutfey Siddiqi, BIDA Executive Chairman Chowdhury Ashik Mahmud Bin Harun and Chief Adviser's Press Secretary Shafiqul Alam were, among others, present at the briefing.

The High Representative said the issue is not something came up suddenly for them as the Chief Adviser instructed them to engage with the US Administration in the beginning of February this year.

Following that instruction, Rahman said, he had meetings with the US officials at the US Department of State and USTR in the second week of February. "Since then we are in continuous discussions."

He hoped that Bangladesh would get a positive response from the US side.

Commerce Adviser Bashir said they are in touch with the Bangladesh Embassy in Washington and the US Embassy in Dhaka.

He said they see both challenges and opportunities, and efforts are there to address the issue and boost Bangladesh's export.

The Commerce Adviser said based on the tariffs imposed on Bangladesh and the nature and structure of trade, they will follow the guidance of the Chief Advisor.

He said the Chief Advisor himself will also engage with the US administration to outline the position on this.

Earlier in the evening, Press Secretary Shafiqul Alam said Bangladesh will be benefited in new global trade and business order.

He said the government is very business and export friendly and Bangladesh's export will only increase instead of a decline due to the steps that are being taken.

"You can remain sure that Bangladesh's export will get a boost to the US market and the entire Western market. Steps are being taken to that end," Alam said.

He said the BIDA Executive Chairman had a separate meeting with the top business people, exporters and trade experts to get their recommendations and decide what should be written to the US Administration.

The government is taking their recommendations very seriously as they are exporters, said the Press Secretary.

Earlier the Chief Adviser held a lengthy emergency meeting with top experts, advisers and officials, giving necessary directives to deal with the US tariff issue.

Foreign Affairs Adviser Md Taouhid Hossain, Energy and Railways Adviser Muhammad Fouzul Kabir Khan, Principal Secretary to Chief Adviser M Siraz Uddin Miah, Policy Research Institute Chairman economist Zaidi Sattar, Bangladesh Bank Governor Dr Ahsan H Mansur, SDGs Affairs Principal Coordinator Lamiya Morshed, NBR Chairman Abdur Rahman Khan and Finance Secretary Khairuzzaman Mozumder were, among others, present at the meeting held at State Guest House Jamuna

On April 3, CA's Press Secretary Alam said their ongoing work with the US government is expected to help address the tariff issue.

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

Alam said the National Board of Revenue is identifying options to rationalise tariffs expeditiously, which is necessary to address the matter.

"The United States is a close friend of Bangladesh and our largest export destination," Alam said.

The Press Secretary said they have been working with the US since the Trump Administration took over to enhance trade and investment cooperation between the two countries.

Bangladesh got slapped with a whopping 37%, Trump team's calculation being that the country imposes 74% tariffs on imports from the US that they then halved for many countries to arrive at 'reciprocal', because "we're such nice people."

Currently, most Bangladeshi goods are subjected to a 15% tariff on entry into the US market.

The new rate is thus well over double the present rate.

The only consolation for Bangladesh might be that a number of its competitors fared worse.

Vietnam got slapped with 46%, Cambodia 49%, Sri Lanka 44%. India and Pakistan fared slightly better though, at 26% and 29% respectively.​

 

[Saif]

US Tariffs: CA holds emergency meeting, give necessary directives

Chief Adviser Professor Muhammad Yunus on Saturday held an emergency meeting with top experts, advisers and officials, giving necessary directives to deal with the US tariff issue. Foreign Affairs Adviser Md Taouhid Hossain, High Representative to CA Dr Khalilur Rahman, Chief Adviser's Special Env

thefinancialexpress.com.bd

US Tariffs: CA holds emergency meeting, give necessary directives
UNB
Published :
Apr 05, 2025 22:25
Updated :
Apr 05, 2025 22:25

Chief Adviser Professor Muhammad Yunus on Saturday held an emergency meeting with top experts, advisers and officials, giving necessary directives to deal with the US tariff issue.

Foreign Affairs Adviser Md Taouhid Hossain, High Representative to CA Dr Khalilur Rahman, Chief Adviser's Special Envoy Lutfey Siddiqi and Bangladesh Bank Governor Dr Ahsan H Mansur were, among others, present at the meeting held at State Guest House Jamuna to discuss the US tariff issue, CA's Deputy Press Secretary Abul Kalam Azad Majumder told UNB.

Earlier on April 3, CA's Press Secretary Shafiqul Alam said their ongoing work with the US government is expected to help address the tariff issue.

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

"Bangladesh is reviewing its tariffs on products imported from the United States," said the Chief Adviser's Press Secretary.

He said the National Board of Revenue is identifying options to rationalise tariffs expeditiously, which is necessary to address the matter. "The United States is a close friend of Bangladesh and our largest export destination," Alam said.

The Press Secretary said they have been working with the US since the Trump Administration took over to enhance trade and investment cooperation between the two countries.

Bangladesh got slapped with a whopping 37%, Trump team's calculation being that the country imposes 74% tariffs on imports from the US that they then halved for many countries to arrive at 'reciprocal', because "we're such nice people."

Currently, most Bangladeshi goods are subjected to a 15% tariff on entry into the US market.

The new rate is thus well over double the present rate.

The only consolation for Bangladesh might be that a number of its competitors fared worse.

Vietnam got slapped with 46%, Cambodia 49%, Sri Lanka 44%. India and Pakistan fared slightly better though, at 26% and 29% respectively.​

 

[Saif]

US starts collecting Trump's new 10pc tariff, smashing global trade norms

U.S. customs agents began collecting President Donald Trump's unilateral 10% tariff on all imports from many countries on Saturday, with higher levies on goods from 57 larger trading partners due to start next week. The initial 10% "baseline" tariff took effect at U.S. seaports, airports and custo

thefinancialexpress.com.bd

US starts collecting Trump's new 10pc tariff, smashing global trade norms
REUTERS
Published :
Apr 05, 2025 20:41
Updated :
Apr 05, 2025 20:41

A cargo ship full of shipping containers is seen at the port of Oakland, as trade tensions escalate over U.S. tariffs, in Oakland, California, U.S., March 6, 2025. Photo : REUTERS/Carlos Barria/Files

U.S. customs agents began collecting President Donald Trump's unilateral 10% tariff on all imports from many countries on Saturday, with higher levies on goods from 57 larger trading partners due to start next week.

The initial 10% "baseline" tariff took effect at U.S. seaports, airports and customs warehouses at 12:01 a.m. ET (0401 GMT), ushering in Trump's full rejection of the post-World War Two system of mutually agreed tariff rates.

"This is the single biggest trade action of our lifetime," said Kelly Ann Shaw, a trade lawyer at Hogan Lovells and former White House trade adviser during Trump's first term.

Shaw told a Brookings Institution event on Thursday that she expected the tariffs to evolve over time as countries seek to negotiate lower rates. "But this is huge. This is a pretty seismic and significant shift in the way that we trade with every country on earth," she added.

Trump's Wednesday tariff announcement shook global stock markets to their core, wiping out $5 trillion in stock market value for S&P 500 companies by Friday's close, a record two-day decline. Prices for oil and commodities plunged, while investors fled to the safety of government bonds.

Among the countries first hit with the 10% tariff are Australia, Britain, Colombia, Argentina, Egypt and Saudi Arabia. A U.S. Customs and Border Protection bulletin to shippers indicates no grace period for cargoes on the water at midnight on Saturday.

But a U.S. Customs and Border Protection bulletin did provide a 51-day grace period, for cargoes loaded onto vessels or planes and in transit to the U.S. before 12:01 a.m. ET Saturday. These cargoes need arrive to by 12:01 a.m. ET on May 27 to avoid the 10% duty.

At the same hour on Wednesday, Trump's higher "reciprocal" tariff rates of 11% to 50% are due to take effect. European Union imports will be hit with a 20% tariff, while Chinese goods will be hit with a 34% tariff, bringing Trump's total new levies on China to 54%.

Vietnam, which benefited from the shift of U.S. supply chains away from China after Trump's first-term trade war with Beijing, will be hit with a 46% tariff and agreed on Friday to discuss a deal with Trump.

Canada and Mexico were exempt from both Trump's latest duties because they are still subject to a 25% tariff related to the U.S. fentanyl crisis for goods that do not comply with the U.S.-Mexico-Canada rules of origin.

Trump is excluding goods subject to separate, 25% national security tariffs, including steel and aluminum, cars, trucks and auto parts.

His administration also released a list, of more than 1,000 product categories exempted from the tariffs. Valued at $645 billion in 2024 imports, these include crude oil, petroleum products and other energy imports, pharmaceuticals, uranium, titanium, lumber and semiconductors and copper. Except for energy, the Trump administration is investigating several of these sectors for further national security tariffs.​

 

[Saif]

US’ new tariffs put BD on uncertain ground

The new "reciprocal" tariff rates imposed by President Donald Trump on almost all of America's trading partners including Bangladesh on April 2 are deeply unreasonable and troubling on multiple fronts. This move signals a complete departure from the global trading system that the United States itse

thefinancialexpress.com.bd

US’ new tariffs put BD on uncertain ground
Published :
Apr 05, 2025 23:45
Updated :
Apr 05, 2025 23:45

The new "reciprocal" tariff rates imposed by President Donald Trump on almost all of America's trading partners including Bangladesh on April 2 are deeply unreasonable and troubling on multiple fronts. This move signals a complete departure from the global trading system that the United States itself painstakingly helped build in the decades following the Second World War and from which it greatly benefited. Economists around the world have called it one of the most damaging and unnecessary economic missteps in modern history and warned of consequences comparable to those of the 1930s. The impact is already being felt globally, with financial markets, Brent crude, and currency exchanges experiencing sharp declines. If these tariffs remain in place, they will no doubt destabilise global commerce and wreak untold havoc on households, businesses, and economies worldwide.

The US presented its new tariffs as reciprocal, claiming that other countries unfairly support their domestic industries through tariffs, currency manipulation, and trade barriers that disadvantage American companies. The administration argued that these new, supposedly discounted reciprocal tariffs were a proportional response to such unfair practices. Thus, according to the Trump administration's logic, Bangladesh allegedly imposes a 74 per cent tariff on US imports, thereby justifying a 37 per cent tariff on Bangladeshi exports to the US. However, this claim is demonstrably false. Bangladesh's customs duties, which are based on the Harmonized System (HS) code, range from 0 per cent to 25 per cent and are non-country specific. This makes the claim of a 74 per cent tariff clearly inaccurate and undermines the very foundation of the reciprocity argument. What actually happened is that the US calculated the tariff by dividing Bangladesh's $6.2 billion trade deficit with the US by its $8.4 billion exports to the US, then halved the result to arrive at 37 per cent. The same arbitrary formula was applied to other countries as well, revealing that these measures are not truly reciprocal but rather aimed at punishing trade surpluses. It also means there is no clear or actionable path for Bangladesh to take in order to have the tariff removed even if it wanted to. Bangladesh could eliminate all of its import tariffs ranging from 0 per cent to 25 per cent and still run a significant trade surplus with the US.

Despite Bangladesh's least developed country (LDC) status, the US has historically excluded its readymade garments export from duty-free access, which results in an average 15 per cent tariff. This is why the newly imposed 37 per cent reciprocal tariff will effectively add 22 per cent to this existing burden. Even though Bangladesh's apparel rivals are also subject to higher tariffs, they are not uniform. Competitors like China (34 per cent), Vietnam (46 per cent), Cambodia (49 per cent) and Sri Lanka (44 per cent) face steep rates, but India (26 per cent) faces milder tariffs. Given that most competitors face similar tariffs, the competitive landscape may remain stable for now. However, there's a real risk that manufacturers, deterred by the high tariffs, could move production to countries like India for lower tariff, or explore emerging garment export hubs like Brazil and the Philippines where lower duties and growing garment industries offer alternatives.

There is no escaping the disruption caused by the new tariffs. Countries are already retaliating with their own measures, as China has done, that may escalate into full-blown global trade war. Under such circumstances, the US is expected to pursue bilateral negotiations with individual countries to secure more favourable terms. Bangladesh must be prepared to engage in such talks, but what leverage does it have when negotiating with a much larger trading partner is a key question. In the long term, Bangladesh must focus on diversifying both its export markets and product base to build resilience against future shocks of this nature.​

 

[Saif]

Trump's trade blitzkrieg: Dhaka needs to explore options

As promised, Donald Trump, President of the United States of America (USA), has imposed reciprocal tariffs on more than 180 countries. He slapped the tariffs on Wednesday last through an executive order titled 'regulating imports with a reciprocal tariff to rectify trade practices that contribute t

thefinancialexpress.com.bd

Trump's trade blitzkrieg: Dhaka needs to explore options
Asjadul Kibria
Published :
Apr 05, 2025 23:39
Updated :
Apr 06, 2025 00:11

As promised, Donald Trump, President of the United States of America (USA), has imposed reciprocal tariffs on more than 180 countries. He slapped the tariffs on Wednesday last through an executive order titled 'regulating imports with a reciprocal tariff to rectify trade practices that contribute to large and persistent annual United States goods trade deficits.' His move aims to address the 'undue' trade deficits faced by the US with its trading partners. In his 4,700 words written order, Trump argued that a lack of reciprocity in bilateral trade, disparate tariff rates and non-tariff barriers, and US trading partners' economic policies suppressing domestic wages and consumption 'constitute an unusual and extraordinary threat to the national security and economy of the United States.' He also mentioned that the threat is reflected in the large and persistent annual US goods trade deficits. As President of the US, Trump argued, his highest duty is ensuring the country's and its citizens' national and economic security. So he has declared 'a national emergency arising from conditions reflected in large and persistent annual US goods trade deficits.' He added that the deficits have grown by over 40 per cent in the past five years alone, reaching $1.2 trillion in 2024.

The imposition of reciprocal tariffs and 10 per cent universal levies has already created global anger and disappointment. Big nations like the European Union (EU) and China reacted sharply and threatened to impose counter-tariffs. On Friday, China hit back by announcing the imposition of reciprocal 34 per cent tariffs on all imports from the US with effect from April 10. The global financial market has tumbled due to Trump's escalation of a worldwide trade war. Tariffs on China, the world's biggest goods exporter, will rise to more than 54 per cent after Trump imposed a further 34 per cent duty on top of the 20 per cent levies he placed on the Asian nation this year. The EU will face total tariffs as high as 20 per cent, while imports from Japan - one of Washington's closest allies - will face tariffs of 24 per cent. There is a 10 per cent tariff on UK exports. For Bangladesh, the reciprocal tariff rate is 37 per cent. The reciprocal tariffs are due to take effect on April 9.

Trump's belief that the US trade deficit with any country is a reflection of unfair trade practices and 'cheating' has led his administration to adopt a unique formula for determining reciprocal tariffs. This formula, which has left trade economists scratching their heads, involves dividing the US trade deficit with a country by the value of goods that country exports to the US. The resulting figure is then considered as the 'tariffs charged to the USA, including currency manipulation and trade barriers.' Finally, the US president halves this figure to determine the reciprocal tariffs.

For instance, the US bilateral trade deficit with Bangladesh was $6.16 billion in 2024, with exports from Bangladesh to the US totaling $8.36 billion. By dividing the deficit by the total exports, we arrive at a figure of 0.74. According to the Trump administration's formula, this means that Bangladesh has imposed a 74 per cent tariff on US goods. Halving this value results in a reciprocal tariff of 37 per cent, which is what Trump has imposed on Bangladesh's exports.

The Trump administration's determination of the tariff rates charged to the USA puzzled everyone. Some argued that it is an arbitrary mechanism defying the most favoured nation (MFN) applied tariff rates, while some mentioned that, given the urgency of the situation, it looked like the 'Trump administration created an estimate that fits their policy goals.' For instance, Bangladesh's MFN applied (simple average) tariff rate is 14.10 per cent for all products. For agriculture, it is 17.70 per cent, and for non-agriculture, it is 13.50 per cent. Imports from the US faced an 8.5 per cent simple average tariff rate in 2022, while the weighted average rate was 15.20 per cent, according to the World Tariff Profile 2024 published by the World Trade Organization (WTO). Moreover, rates of tariff vary from product to product.

The imposition of 37 per cent of the reciprocal tariff on Bangladesh is inconsistent with various norms and regulations of the WTO. It is subject to challenge in the multilateral trade body. Last month, Canada and China filed complaints against the US for imposing and enhancing tariffs on the number of products these countries produce. For instance, Canada claimed that the announced additional US ad valorem duties of 25 per cent on all non-energy goods and 10 per cent on energy goods originating in Canada are 'inconsistent with various provisions of the General Agreement on Tariffs and Trade (GATT) 1994 as well as the WTO's Trade Facilitation Agreement (TFA).' So, Canada formally requested WTO dispute consultations with the US in this connection.

However, Bangladesh and most of the countries are not in a position to go to the WTO seeking dispute consultations with the US for obvious reasons. Trump doesn't like WTO, and in his first term, he blocked the appointment of judges in the dispute settlement panel of the organisation. Biden continued the step, turning the WTO dispute settlement mechanism partially dysfunctional. In his current term, Trump will maintain the stance and may even act aggressively to make the whole organisation dysfunctional. Only a few countries will take the risk to drag the US into WTO.

Suggestions have started flowing from various quarters for the Bangladesh government to address the big challenge. However, many of those reflect the lack of understanding on the matter. One suggestion is to immediately reduce the tariffs on US products and increase the imports of goods from the country. It is not possible to increase the imports immediately. Moreover, there are some problems with unilaterally reducing tariffs on imports from the US. As there is no bilateral free trade agreement (FTA) between Bangladesh and the USA, any unilateral move by Bangladesh to reduce tariffs will breach the WTO MFN principle. In that case, any other trading partner like India may raise objections to dragging Bangladesh into WTO, which will be troublesome.

Against this backdrop, Dhaka needs to maintain its restraints before addressing Washington's reciprocal tariff. Instead, the country must carefully watch what other countries, especially competitors and peers, are doing. The government may also explore the options to initiate talks with the US under TICFA, which provides a unique platform. As the USA is a developed country, Bangladesh cannot sign a Preferential Trade Agreement (PTA). So, negotiation to sign an FTA for goods with the USA may be the only option to address the challenge in the long term. It will help cut tariffs by both countries, widening opportunities to enhance the exports of ready-made garments (RMG), which is 84 per cent of Bangladesh's total exports to the US.​

 

[Saif]

Who wins tariff war?

What US President Donald Trump hails as a day of liberation for America could, in reality, signal the onset of global economic recession if his administration remains steadfast in pursuing its sweeping "reciprocal tariff" policy. The so-called "reciprocal tariffs"-which reach as high as 50 per cent

thefinancialexpress.com.bd

Who wins tariff war?
Atiqul Kabir Tuhin
Published :
Apr 05, 2025 23:33
Updated :
Apr 05, 2025 23:33

What US President Donald Trump hails as a day of liberation for America could, in reality, signal the onset of global economic recession if his administration remains steadfast in pursuing its sweeping "reciprocal tariff" policy. The so-called "reciprocal tariffs"-which reach as high as 50 per cent on goods from nearly all US trading partners, including Bangladesh-have already sent shockwaves throughout the global marketplace. The world now stands on the precipice of a full-blown trade war, and China has already retaliated by imposing a 34 per cent reciprocal tariff on all US imports, effectively matching the tariff rate Washington has set against Beijing. France, Canada, and other nations have vowed to follow suit.

This tit-for-tat tariff escalation in an already sluggish global economy poses significant risks, as the International Monetary Fund (IMF) has warned. The last time the US pursued similar trade policies-during the 1930s-the world plunged into the Great Depression. Adding to the growing concern, investment bank JP Morgan has raised its forecast, predicting a 60 per cent chance of the global economy entering recession by the end of the year due to these aggressive tariff measures.

The stated purpose of the Trump administration's imposition of reciprocal tariffs is to revive US manufacturing by raising the cost of foreign-made goods, thus encouraging investors to bring production back to the United States. But the question is how can the US reinstate industries-particularly labour-intensive sectors like apparel manufacturing-that have long been outsourced to developing nations? While the American public may yearn for the return of high-tech, sustainable jobs, they are unlikely to be thrilled by the prospect of low-skilled, labour-intensive jobs that thrived in countries like Bangladesh.

The imposition of blanket tariffs on goods like ready-made garments-items the US simply cannot produce in bulk-will only drive up prices. The importer is the one who pays the tariff, and that cost inevitably gets passed down to consumers. As a result, inflation will rise significantly in the US, reducing consumer demand and shrinking the domestic market. This price inflation is likely to contract the economy, exacerbating the very problem Trump's policy intends to solve.

Moreover, restoring industries to the US is not something that can be accomplished overnight. It requires time, investment, and a stable policy environment. The long-term success of Trump's tariff policy is jeopardised by the inherent policy uncertainty that plagues his administration. There is a high likelihood that a subsequent US government could reverse these tariff policies, making investors reluctant to commit to long-term domestic production. This volatility could ultimately undermine the intended objectives of the tariff regime, creating further instability in the global market.

For countries like Bangladesh, the repercussions of this policy could be particularly dire. The Trump administration has imposed a 37 per cent tariff on Bangladesh, and the ready-made garment sector-which is the country's key export industry-will bear the brunt of these new measures. Currently, the United States imports between $90 and $100 billion worth of clothing annually, and this could drop to around $60 to $70 billion as a result of the inflation due to the tariff hikes. Bangladesh, which exports approximately $6 to $7 billion in garments to the US each year, is likely to feel the impact.

But Bangladesh is not alone. Other major garment-exporting countries, including China (with a 34 per cent tariff), Vietnam (46 per cent), Indonesia (32 per cent), Cambodia (49 per cent), and India (26 per cent), are also facing these heavy tariffs. All of these nations could be affected by these changes, although stakeholders think it will take time to fully grasp the situation.

As the global trade landscape shifts, Bangladesh must act swiftly and strategically to safeguard its interests. Proactive economic diplomacy will be essential, as engaging in constructive dialogue with the Trump administration could help mitigate some of the damage. Simultaneously, Bangladesh must diversify its export markets to reduce dependence on the US. China, which exports $25 billion worth of garments to the US annually, is likely to shift its focus to other markets, particularly the European Union. Bangladesh holds a 21 per cent share of the EU's ready-made garment market. If China undercuts prices in the EU to remain competitive, Bangladesh could face significant losses in this key market as well. Therefore, navigating this turbulent global trade landscape will require astute and timely policy responses from both the government and the private sector to ensure that the country can weather the economic storm.​

 

[Saif]

https://thefinancialexpress.com.bd/views/views/trumps-trade-war-disrupts-global-economy

Trump's trade war disrupts global economy
Muhammad Mahmood
Published :
Apr 05, 2025 23:28
Updated :
Apr 05, 2025 23:28

Since Donald Trump's return to the White House on January 20, he has been ramping up his trade war agenda fuelling uncertainty over global trade and growth. The increase in tariffs and the expanded scope of their application on imported goods not only affects the US economy but also has worldwide repercussions. Economic theory and empirical evidence clearly demonstrate that tariffs reduce economic efficiency, generate welfare loss and distort global markets.

The US is a powerful player in global trade. In 2024, the US was the second-largest global merchandise exporter with over US$2,083.8 billion in exports and the largest importer with about US$3,295.6 billion in imports, resulting in a US$1.211.8 billion merchandise trade deficit. While the US runs a trade deficit in goods, a surplus in services trade is estimated to be around US $293.4 billion, with services exports reaching US$1,107.8 billion and services imports US$814.4 billion in the same year. But the overall trade balance remains in deficit at US$918.4 billon.

Trade has been cited as a major contributing factor to the relative decline of the US economy in the global context. Trump claims tariffs will enhance US manufacturing, safeguard jobs, increase tax revenue, and stimulate domestic economic growth. He also wants to restore America's trade balance with its trading partners, reducing the gap that exists between US imports from and exports to individual countries. These tariffs aim to reduce a US$1.2 trillion merchandise trade deficit by raising US tariffs to match those of other countries and counter their non-tariff barriers.

One reason suggested for the large trade deficit in the US is that its economy has been performing strongly compared to other economies, particularly those of industrialised countries. That means there is more demand in the US for foreign goods than the demand in other countries for American goods. The strong US dollar also makes imports relatively cheaper for Americans and U.S. exports more expensive for overseas customers.

But on a more theoretical level, the trade deficit is caused by Americans buying more from foreign countries than exporting to them or more precisely Americans are consuming more than they are producing. Where is this extra American purchasing power coming from? Due to ongoing budget deficits and tax cuts, additional purchasing power is being injected into the US economy. There is a close symmetry between the budget deficit and the current account deficit where a larger budget deficit quite often leads to a larger current account deficit. Therefore, Trump's assertion that foreign countries are ripping off the US is a complete and utter nonsense.

Trump's senior trade counsellor Peter Navarro said at a meeting that Trump wanted a transition of the US economy to one where the government relies less on income taxes and more on tariff revenue to fund its operations. This consumption-based tax regime operates in most LDCs, including Bangladesh. He also told Fox News that the new tariff regime would lead to new industrial golden age. He further added they would not only enable broad tax cuts while reviving manufacturing and protecting national security by ensuring the US did not rely on foreign products.

If Trump's tariffs fail to re-industrialise the US, they may prove as ineffective as the McKinley tariffs of 1890, which President McKinley later regretted. Furthermore, the economic problems that Trump is attempting to address are very deep-rooted and have been in the making for more than half a century. Tariffs will not solve these problems.

Navaro is effectively advocating for the Mercantilist economic doctrine, which was prevalent in Europe from the 16th to the mid-18th centuries, encompassing the transition from the Renaissance to the early modern period. Mercantilism was a form of economic nationalism that sought to increase the prosperity and power of a nation through restrictive trade practices. Mercantilism also provided the philosophical foundation for colonisation and colonial expansion.

It is most unlikely that Trump's tariffs can bring back manufacturing and make the US self-sufficient and at the same time by raising so much tariff revenue the US can do away with income tax. Some Trump supporters think that tensions from tariffs could revive US manufacturing. Many observers also believe that the US armament industry requires a strong domestic manufacturing base for long-term survival and continue uninterrupted supply to the military for the world-wide military operations, which Trump understands and supports.

The US economy has shifted from manufacturing to a service-oriented focus, as shown in its GDP composition. In 2024, the service sector dominated the US GDP, accounting for about 79.9 per cent, while goods-producing industries like manufacturing and agriculture contributed 19.1 per cent and 1.2 per cent respectively. Now to turn that back to the other direction will be a stupendous task.

Trump's tariff offensive since his assumption office in January has been marked by threats, reversals and delays and his trade team appears to be trying to formulate policy on the fly. But some also argue that such an erratic behaviour of Trump is typical of his pathological need for "escalation dominance".

To date, the administration has implemented a 25 per cent tariff on steel and aluminium, a 20 per cent duty on imports of goods from China, and a 25 per cent tariff on imports from Canada and Mexico. On March 25 President Trump issued an executive order imposing a 25 per cent tariff on import of all cars designated to have been made overseas. The tariff will go into effect on April 2, the day Trump has for weeks called "Liberation Day" and will unveil his "reciprocal tariffs" programme.

His reciprocal tariffs will feature rates on a country-by-country basis corresponding to tariffs and non-tariff barriers US products face. The reciprocal tariff rate will account for the actual tariff rate and domestic policies of other countries that hinder US exports. The extent of tariff coverage is uncertain due to various technical and political factors. The world has been collectively waiting for Trump to reveal the details of his new tariffs known as "Reciprocal Tariffs".

Last Wednesday (April 2), Trump announced his "liberation day" global tariffs plan at the White House Rose Garden. Trump's tariffs, which he imposed via executive order, are expected to send economic shockwaves around the world. He slapped a baseline tariff of 10 per cent against all trading partners, plus extra tariff as high as 46 per cent against select countries. He vowed that his tariffs plan would be enacted immediately.

Many developing countries in Asia and Africa including Bangladesh are also facing the highest tariff rates imposed by President Trump. In Southeast Asia, Cambodia has a tariff rate of 49 per cent, followed by Laos at 48 per cent, Vietnam at 46 per cent, Myanmar at 46 per cent, Thailand at 36 per cent, and Indonesia at 32 per cent. In fact, South- East Asian countries are among the hardest-hit by Trump's tariffs. Lesotho faces the highest tariff in Africa at 50 per cent, followed by Madagascar at 47per cent and Botswana at 37per cent.

Sri Lanka has the highest reciprocal tariff rate in South Asia at 44 per cent, followed by Bangladesh at 37 per cent, Pakistan at 29 per cent, India at 26 per cent, and Nepal at 10 per cent. The US asserts that Bangladesh imposes tariffs of up to 74 per cent on American products.

Bangladeshi exports to the US market are now subject to a 37 per cent tariff, an increase from the previous rate of 15 per cent, more than doubling the existing tariff rate. The US is the largest market for Bangladeshi readymade garments. In 2024, Bangladesh exported US$8.4 billion of goods to the US of which US$7.34 billion was readymade garments.

The tariffs on South-East Asian countries are primarily targeted at Chinese investment. By targeting products from these countries will negatively impact on Chinese exports. A key goal of Trump's tariffs is to separate the US economy from China by imposing high trade barriers on goods made by Chinese companies, regardless of their country of origin.

Lashing out at foreigners, Trump said that foreign leaders had "stolen our jobs, foreign cheaters have ransacked our factories, and foreign scavengers have torn apart our once-beautiful American dream". US Treasury Secretary Scott Bessent warned countries hit by Trump's new tariffs not to retaliate."Do not retaliate," he said. "If you retaliate, there will be escalation."

Speaking to Ireland's Newstalk, ECB President Christine Lagarde said that the effects of Trump's tariffs would be "negative…the world over". The OECD states that Trump's trade wars are slowing global growth and increasing inflation. EU Chief Ursula von der Leyen described the tariffs as a major blow to the world economy and said the 27-member bloc was prepared to respond with countermeasures if talks with Washington failed. She further added, "The consequences will be dire for millions of people around the globe". The tariffs "clearly represent a significant risk to the global outlook at a time of sluggish growth," IMF Managing Director Kristalina Georgieva said in a statement. Michael Gasiorek, the director of the UK Trade Policy Observatory at Sussex University, stated, "For all intent and purposes, the US is now a rogue nation when it comes to trade".

Critics within the US contend that Trump's protectionism will cause price hikes and likely to drive the economy into recession. In fact, many observers point out that Trump's tariffs will lead to a contractionary macroeconomic shock of 2 per cent of GDP resulting in stagflation. As the US economy slows down significantly in the short run, it will drag down the global economy. Trading partners from the EU to Canada and Mexico have vowed to respond with retaliatory tariffs and other non-tariff measures. China also vowed retaliation for Trump's 54 per cent tariffs on imports into the US from the country.

The ongoing trade tensions between the US and other countries resulting from Trump's tariffs have created economic uncertainty and may cause significant damage to the global economy. In fact, the global economy, already experiencing some of the lowest growth in decades, is now about to take another major blow. The lessons countries around the world draw will help determine just how much the global economy cracks up as Trump's trade war deepens and what will be the way out of the crisis.​