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

[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.​

 

[Saif]

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.

He is a planted agent of RAW in Bangladesh. He is the guy who proposed the elimination of investment in Textile sector as it was capital intensive. He proposed importing textile from India instead.

 

[Saif]

https://www.thedailystar.net/business/news/trump-tariffs-are-they-really-reciprocal-3863881

Trump tariffs: are they really reciprocal?

The US president issued an executive order on 2 April 2025 to impose reciprocal tariffs, comprising two main actions. First, a 10 percent baseline tariff on all imports—on top of existing tariffs—effective 5 April 2025. Second, country-specific tariffs on imports from 53 targeted countries, effective 9 April. However, if more than 20% of a product's value is of US origin, only the non-US portion will be taxed. There are also exceptions—goods already in transit, items listed in Annex II (e.g., steel, aluminium, automobiles, copper, pharmaceuticals, semiconductors, lumber, critical minerals, and energy products), imports from Belarus, Cuba, North Korea, and Russia, and products from Canada and Mexico under USMCA rules. These actions signify a clear deviation from WTO's most favoured nation (MFN) principle that has been in place since the GATT came into force in 1947.

To understand the rationale behind these tariffs, one must assess the stated objectives and how the so-called "reciprocal tariffs" were determined. According to the executive order, persistent US trade deficits are largely caused by the lack of reciprocity in bilateral trade—especially via disparate tariff rates and non-tariff barriers that disadvantage US manufacturers abroad. The order highlights that the average tariff imposed by the US is considerably lower than that of the EU, India, Brazil, Vietnam, and China. Product-level comparisons show similar results. The order also blames trading partners for blocking multilateral tariff negotiations and maintaining market access barriers that limit US exports.

On 13 February 2025, prior to issuing the order, the president signed a memorandum titled "Reciprocal Trade and Tariffs," directing a review of non-reciprocal trade practices and their links to the trade deficit. The review considered tariffs imposed on US products, discriminatory taxes (like VAT), non-tariff barriers, currency manipulation, and other policies deemed harmful to US competitiveness which apparently led to the current tariff measures.

While the 10% baseline tariff appears aimed at reducing the overall trade deficit, it does not reflect any reciprocal framework. More critically, the way country-specific reciprocal tariffs are calculated raises serious questions. Supposedly, the formula used, estimates tariff rates needed to bring bilateral trade balance to zero. The proposed tariffs are in fact only half of these estimates, termed as "discounted reciprocal tariffs." This approach incorrectly assumes that trade balance is a function of tariff symmetry, ignoring factors such as comparative advantage and service trade.

For example, the US and Israel have had a free trade agreement since 1985, yet the US still runs a goods trade deficit with Israel, while enjoying a surplus in services and investment. It is implausible that Israeli trade practices amount to a 34% tariff burden on US goods. Similarly, US exports to Bangladesh face a 15% import-weighted duty, while US imports face only 3.32% average duty in Bangladesh. No known barrier specifically targets US goods, making the idea of a 74% "reciprocal tariff" on Bangladeshi exports unfounded. The so-called reciprocal tariffs are merely tools to target trade deficits, not measures to reflect actual reciprocity in trade practices.

Dr. Mostafa Abid Khan is former member of Bangladesh Trade and Tariff Commission​

 

[Saif]

Bangladesh earned Tk 1,500cr tariff from US imports in FY24

"Bangladesh generates a negligible amount of revenue from taxes levied on goods imported from the United States"

www.thedailystar.net

Bangladesh earned Tk 1,500cr tariff from US imports in FY24

Bangladesh generates a negligible amount of revenue from taxes levied on goods imported from the United States, according to an internal assessment by the revenue board following Washington's announcement of imposing a 37 percent reciprocal tariff on Bangladeshi products entering the US market.

In the July-March period of fiscal year (FY) 2024-25, taxes on US imports brought in just around Tk 1,000 crore -- less than 2 percent of the total revenue collected from all imports during that period.

Bangladesh imported goods worth Tk 22,168 crore from the US during those nine months, with tax receipts from those imports totalling Tk 1,010 crore, according to the National Board of Revenue (NBR).

In contrast, overall revenue from global imports reached Tk 64,439 crore during the period, according to the latest NBR report.

The scenario was similar in FY24, when tax collected from US imports amounted to Tk 1,499 crore against total revenue of Tk 100,819 crore, which was around 1.5 percent of Bangladesh's total earnings from import duties.

The country's import payments stood at Tk 702,230 crore in FY24, of which Tk 28,144 crore went to the US, reflecting only 4 percent Bangladesh's total merchandise imports, according to the Bangladesh Bank data.

In FY23, tax collected from US imports amounted to Tk 1,316 crore.

In the first nine months of the current fiscal year, Bangladesh imported more than 2,200 items from the US, but just 10 of those accounted for over Tk 500 crore in tax revenue.

Among these, motor cars faced the highest total tax incidence (TTI) at 150.76 percent, while chemical wood pulp had the lowest at 20 percent.

Bangladesh has over 7,500 tariff lines, with the highest TTI reaching as much as 1,021 percent.

In terms of value, major imports from the US included ferrous waste and scrap at Tk 202 crore, artificial filament tow of cellulose acetate at Tk 118 crore, and almonds at Tk 55 crore.

The internal NBR exercise was carried out after US President Donald Trump slapped a steep reciprocal tariff on Bangladeshi goods citing widening trade deficits.

The US government claimed Bangladesh effectively imposes a 74 percent tariff on American goods. In response, a 37 percent "discounted reciprocal tariff" will now be levied on Bangladeshi products entering the US market.

However, an NBR official, speaking on condition of anonymity, told The Daily Star yesterday that the average weighted tariff on US imports currently stands at around 3 percent.

"If we include other duties such as supplementary and regulatory duties, the average tariff would be closer to 3.5 percent," added the official.

Another senior NBR official said there is a zero-duty privilege for a number of US items, including cotton, soybeans, liquified natural gas and petroleum products.

"So, the total effective import tax on merchandise goods from the US stands below 5 percent."

According to the revenue official, as the issue centres on reducing the trade deficit with the US, they have selected nearly a dozen items on which import tariffs could be reduced.

"Even if we reduce import duties on certain US items, imports may not increase unless the private sector is willing to source items from the American market. An option could be government purchases to narrow the trade gap," he said.

Similarly, MA Razzaque, chairman of the Research and Policy Integration for Development, a local think tank, dismissed Washington's claim of a 74 percent tariff being imposed by Bangladesh on American products.

"The Trump-era reciprocal tariff formula is completely unscientific and economically irrational," the economist said. "It's methodologically flawed and fundamentally wrong."

Razzaque argued that simply lowering tariffs would not significantly boost US exports to Bangladesh.

"As the US is not a competitive player in the manufacturing sector, simply reducing tariffs won't lead to a significant increase in imports," he commented. "Under the current circumstances, it's very difficult to boost imports from the US."

Razzaque warned against making unilateral concessions. "Bangladesh has a tariff structure for all countries. If we make an exception for the US, other nations like India and Japan may demand the same preferential treatment," he said.

Asked how Bangladesh should respond, he advised initiating discussions with the US and engaging in stronger negotiations.

As of 8pm yesterday, Chief Adviser Professor Muhammad Yunus was at an emergency meeting with leading economists, advisers, and senior government officials to formulate a response.

A source who attended the meeting said the NBR is likely to recommend increasing imports of around 15 products from the US. These include plastic goods, capital machinery, generators, frozen meat, electric bulbs, and cables, among others.

Shafiqul Alam, press secretary to the chief adviser, said the meeting aimed to shape Bangladesh's position on the issue. "We'll discuss how to draft our communication and what exactly to convey to the US administration," he said.

"A positive outcome is expected from the meeting. This government is highly business-friendly. We will take steps that will not only sustain but increase our exports to the US."

Economist Zahid Hussain stated that liberalising tariffs might not lead to significant revenue loss if the reduced tariffs are applied solely on imports from the US. However, this approach could be problematic due to WTO regulations that prohibit rate discrimination based on origin. It may also lead to feelings of discrimination among European and Asian partners.

"Instead of focusing solely on US imports, we should consider revamping the entire protective tariff structure with the aim of lowering the overall nominal protection rate by 10-20 percentage points. Any resulting revenue shortfalls could be compensated through reforms in VAT and income tax."

He also pointed out that reforming non-tariff barriers, which the USTR has identified as significant obstacles to trade in Bangladesh, would not result in revenue loss.

Hussain emphasised the need for a comprehensive reform package that includes measures to reduce tariffs, para-tariffs, and non-tariff barriers.

"Such a package would be seen as a credible tool for reducing the US trade deficit with Bangladesh without diminishing our exports to the US," said Hussain, who is also a former lead economist at The World Bank.​

 

[Bilal9]

He is a planted agent of RAW in Bangladesh. He is the guy who proposed the elimination of investment in Textile sector as it was capital intensive. He proposed importing textile from India instead.

Whoa - I was right all along. Good call and my thoughts exactly!

 

[Bilal9]

Bangladesh earned Tk 1,500cr tariff from US imports in FY24

"Bangladesh generates a negligible amount of revenue from taxes levied on goods imported from the United States"

www.thedailystar.net

Bangladesh earned Tk 1,500cr tariff from US imports in FY24

View attachment 16272

Bangladesh generates a negligible amount of revenue from taxes levied on goods imported from the United States, according to an internal assessment by the revenue board following Washington's announcement of imposing a 37 percent reciprocal tariff on Bangladeshi products entering the US market.

In the July-March period of fiscal year (FY) 2024-25, taxes on US imports brought in just around Tk 1,000 crore -- less than 2 percent of the total revenue collected from all imports during that period.

Bangladesh imported goods worth Tk 22,168 crore from the US during those nine months, with tax receipts from those imports totalling Tk 1,010 crore, according to the National Board of Revenue (NBR).

In contrast, overall revenue from global imports reached Tk 64,439 crore during the period, according to the latest NBR report.

The scenario was similar in FY24, when tax collected from US imports amounted to Tk 1,499 crore against total revenue of Tk 100,819 crore, which was around 1.5 percent of Bangladesh's total earnings from import duties.

The country's import payments stood at Tk 702,230 crore in FY24, of which Tk 28,144 crore went to the US, reflecting only 4 percent Bangladesh's total merchandise imports, according to the Bangladesh Bank data.

In FY23, tax collected from US imports amounted to Tk 1,316 crore.

In the first nine months of the current fiscal year, Bangladesh imported more than 2,200 items from the US, but just 10 of those accounted for over Tk 500 crore in tax revenue.

Among these, motor cars faced the highest total tax incidence (TTI) at 150.76 percent, while chemical wood pulp had the lowest at 20 percent.

Bangladesh has over 7,500 tariff lines, with the highest TTI reaching as much as 1,021 percent.

In terms of value, major imports from the US included ferrous waste and scrap at Tk 202 crore, artificial filament tow of cellulose acetate at Tk 118 crore, and almonds at Tk 55 crore.

The internal NBR exercise was carried out after US President Donald Trump slapped a steep reciprocal tariff on Bangladeshi goods citing widening trade deficits.

The US government claimed Bangladesh effectively imposes a 74 percent tariff on American goods. In response, a 37 percent "discounted reciprocal tariff" will now be levied on Bangladeshi products entering the US market.

However, an NBR official, speaking on condition of anonymity, told The Daily Star yesterday that the average weighted tariff on US imports currently stands at around 3 percent.

"If we include other duties such as supplementary and regulatory duties, the average tariff would be closer to 3.5 percent," added the official.

Another senior NBR official said there is a zero-duty privilege for a number of US items, including cotton, soybeans, liquified natural gas and petroleum products.

"So, the total effective import tax on merchandise goods from the US stands below 5 percent."

According to the revenue official, as the issue centres on reducing the trade deficit with the US, they have selected nearly a dozen items on which import tariffs could be reduced.

"Even if we reduce import duties on certain US items, imports may not increase unless the private sector is willing to source items from the American market. An option could be government purchases to narrow the trade gap," he said.

Similarly, MA Razzaque, chairman of the Research and Policy Integration for Development, a local think tank, dismissed Washington's claim of a 74 percent tariff being imposed by Bangladesh on American products.

"The Trump-era reciprocal tariff formula is completely unscientific and economically irrational," the economist said. "It's methodologically flawed and fundamentally wrong."

Razzaque argued that simply lowering tariffs would not significantly boost US exports to Bangladesh.

"As the US is not a competitive player in the manufacturing sector, simply reducing tariffs won't lead to a significant increase in imports," he commented. "Under the current circumstances, it's very difficult to boost imports from the US."

Razzaque warned against making unilateral concessions. "Bangladesh has a tariff structure for all countries. If we make an exception for the US, other nations like India and Japan may demand the same preferential treatment," he said.

Asked how Bangladesh should respond, he advised initiating discussions with the US and engaging in stronger negotiations.

As of 8pm yesterday, Chief Adviser Professor Muhammad Yunus was at an emergency meeting with leading economists, advisers, and senior government officials to formulate a response.

A source who attended the meeting said the NBR is likely to recommend increasing imports of around 15 products from the US. These include plastic goods, capital machinery, generators, frozen meat, electric bulbs, and cables, among others.

Shafiqul Alam, press secretary to the chief adviser, said the meeting aimed to shape Bangladesh's position on the issue. "We'll discuss how to draft our communication and what exactly to convey to the US administration," he said.

"A positive outcome is expected from the meeting. This government is highly business-friendly. We will take steps that will not only sustain but increase our exports to the US."

Economist Zahid Hussain stated that liberalising tariffs might not lead to significant revenue loss if the reduced tariffs are applied solely on imports from the US. However, this approach could be problematic due to WTO regulations that prohibit rate discrimination based on origin. It may also lead to feelings of discrimination among European and Asian partners.

"Instead of focusing solely on US imports, we should consider revamping the entire protective tariff structure with the aim of lowering the overall nominal protection rate by 10-20 percentage points. Any resulting revenue shortfalls could be compensated through reforms in VAT and income tax."

He also pointed out that reforming non-tariff barriers, which the USTR has identified as significant obstacles to trade in Bangladesh, would not result in revenue loss.

Hussain emphasised the need for a comprehensive reform package that includes measures to reduce tariffs, para-tariffs, and non-tariff barriers.

"Such a package would be seen as a credible tool for reducing the US trade deficit with Bangladesh without diminishing our exports to the US," said Hussain, who is also a former lead economist at The World Bank.​

The tariff thing Trump implemented is not exclusive to us in Bangladesh, and in fact punishes other competitor countries In Asia (who compete on similar exports to the US) similarly or worse. For example, Vietnam tariff rate is higher - as is Cambodia's. Although India's rate is lower than ours, India's exports (apparel-wise) to the US are hardly as wide-ranging as that of Bangladesh. And tariff's on India's Pharma (as well as back office exports) could be punitive as well, which is yet to be announced.

The chickens have come home to roost.