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

[Saif]

US TARIFFS ON BANGLADESH: A call to action

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

www.newagebd.net

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

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

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

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

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

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

Computation basis

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

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

Implications

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

A call for action

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

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

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

Medium term measures include:

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

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

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

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

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

 

[Saif]

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

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

thefinancialexpress.com.bd

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

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

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

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

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

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

 

[Saif]

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

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

www.thedailystar.net

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

[Saif]

Trump tariffs could be a defining moment for Bangladesh

On April 2, what was labelled as "liberation day", US President Donald Trump launched his global tariff war against every country in the world, including the uninhabited Heard and McDonald Islands off the coast of Antarctica. His tariffs were labelled as "reciprocal" despite they bore no relationsh

thefinancialexpress.com.bd

Trump tariffs could be a defining moment for Bangladesh
Muhammad Mahmood

Published :
May 25, 2025 00:37
Updated :
May 25, 2025 00:37

On April 2, what was labelled as "liberation day", US President Donald Trump launched his global tariff war against every country in the world, including the uninhabited Heard and McDonald Islands off the coast of Antarctica. His tariffs were labelled as "reciprocal" despite they bore no relationship to any tariffs or other trade barriers these countries imposed on US exports.

Nothing like Trump tariffs have ever been imposed before, they outstrip by far, even the Smoot-Hawley tariffs imposed by the US in the 1930s. Those tariffs ultimately led to the Great Depression and social devastation culminating in Worl War II. Trump tariffs are an economic absurdity raised to new heights disrupting the rule based global trading system with serious implications for developing countries like Bangladesh and their economic future.

Trump imposed a 37 per cent reciprocal tariff (RT) on imports from Bangladesh on that very day chiefly affecting ready-made garments (RMG),triggering alarm among exporters. Washington maintains that the step is taken, because what the US administration calls the effective rate of tariff (a term that encompasses both taxes and regulatory compliance costs) that Bangladesh charges is 74 per cent on US goods.

But Bangladesh also faces disproportionately high taxes on clothing and footwear imports into the US already. Bangladeshi imports into the US were subject to an average tariff of 15.7 per cent. The Trump tariff rate for Bangladesh is higher than for its RMG competitors India (27 per cent) and Pakistan (30 per cent) but less than Cambodia (49 per cent), Sri Lanka (44 per cent), and China (40 per cent).

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

It is to be noted that tariffs are a tax that a country imposes on itself as it imposes costs in the same way that a tax on domestic products imposes costs. Tariffs can also harm trading partners, but that doesnot change the fact that the main victim is generally the country imposing tariffs.

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

Up until "reciprocal tariffs" (RT) were introduced, Bangladeshi exports faced an average tariff of about 15.7 per cent. If the new tariff eventually come into effect, the average tariff rate could jump to 52.7 per cent.In 2024, Bangladesh exported goods worth nearly $8.4 billion to the US, of which US$7.34 billion were readymade garments (RMG). More than four million people work in the RMG industry in Bangladesh, and most of those workers are women and most of them?live pay check to pay check-are also facing increasing job insecurity. The Trump tariffs could force factory closures ?and workers being laid off, as such the stakes are not only?economic but also existential.

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

As Bangladesh deals with this latest trade shock, it is becoming increasingly clearer that?the US is being remade by rising American economic nationalism under the banner of "Make America Great Again" (MAGA). But for Bangladesh, this is not merely a matter of the after-effects of US policy - it is?a question of national survival.

Since taking over the rein of the country the interim government headed by Nobel Laureate Mohammad Yunus has faced numerous challenges, from high inflation and unemployment to delays in implementing crucial reforms across the judiciary, political system and economy, primarily due to ongoing law and order issues. Also, there is a growing concern that members of the criminal syndicate run by ousted Hasina are regrouping.

Till now the economic and political situation in Bangladesh remains fragile and fluid. Under such circumstances Trump tariffs are an alarming news for the country because the US is Bangladesh's single largest export destination accounting for about 17 per cent of the country's exports. It is estimated that about 86 per cent of total exports to the US are RMGs. Other goods include leather footwear, leather goods, home textiles.

If Bangladesh wishes to continue to rely on RMG exports, the industry needs to keep pace with technological progress and innovate to remain a relevant player in global apparel trade. Now the future of the RMG industry depends on robotics and AI technologies which will begin to reshape the RMG industry as already happened in most other industries already.

Immediately after the imposition of the tariffs, Head of Bangladesh's interim government Muhammad Yunus has written to US President Donald Trump requesting a three-month pause on a 37 per cent tariff on imports from Bangladesh, citing efforts to boost imports from the US. To reduce the US$6.2 billion trade surplus with the US in 2024, Bangladesh has pledged to add 100 American products to its duty-free list, according to the commerce advisor. "We hope the letter will have a positive impact. Our main goal is to narrow the trade gap," he further added.

On May 7, in a letter to the Commerce Adviser, USTR Jamieson Greer stated that the US administration acknowledges the response from the Bangladesh government and is prepared to begin trade negotiations within the framework of President Trump's "reciprocal tariffs" policy. The US will cooperate closely to address bilateral trade imbalances.

However, on May 16, Trump said U.S. trading partners should expect individual letters from Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick "at a certain point over the next two to three weeks," in which they would be "telling people what they will be paying to do business in the United States." He did not specify which countries would receive letters telling them what they would pay, and which countries still could negotiate.

It is likely that many smaller, poorer countries, not considered to be of great importance to US economic relations, but which were hit by heavy tariffs, will get a letter reimposing the April 2 measures.

One of the objectives of RT is to expand market access for US agricultural products to bridge the trade gap. In fact, Bangladesh mostly imports agricultural products from the US among others. Any trade negotiation with the US to bridge the trade gap will mostly likely involve Bangladesh agreeing to import more agricultural products.

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

Therefore, importation of highly subsidised US farm products could pose a threat to the livelihood of marginal to small farmers and farm labourers notwithstanding the impact on country's drive to attain food grain self-sufficiency. Therefore, if Bangladesh agrees to import more subsidised agricultural products it must make it clear to the US administration that any subsidised agricultural products may be subject to Countervailing duties (CVD), also known as anti-subsidy duties.

CVDs are tariffs on imported goods that are imposed to offset subsidies by the exporting country's government. CVDs help offset any negative domestic impacts that producers of the same good might experience due to competition from foreign subsidised products, in this case subsidised US agricultural products. The WTO permits CVDs to be charged only after proper investigation has been conducted by the importing country into the subsidised exports.

The interim government has already expressed its desire to start negotiations with the Office of the US Trade Representative (USTR) and is reviewing Bangladesh's own?tariffs on American imports in a bid to resolve the standoff. Now in view of Trump's declaration on May 16, it is not clear whether Bangladesh will receive a letter unilaterally deciding the tariff rate for Bangladesh or will be able to negotiate.

In either case, Bangladesh's trade relationship with the US is unlikely to undergo any drastic changes soon, but the Bangladesh government needs to approach the trade imbalance issue very carefully and strategically to ensure that the interest of Bangladeshi farmers are safeguarded.

Bangladesh could also build coalitions with similarly affected countries like Cambodia, Pakistan, Vietnam and Sri Lanka to jointly raise concerns at the WTO-- however symbolic that might be given the WTO has been rendered ineffective by the US.

But the process of bringing about changes in tariff schedules and changes in trade policy in Bangladesh is slow and complicated because of longstanding vested interests who have been benefitting from the current trade regime. Also, the political and bureaucratic systems are deeply corrupt and socially patronage culture is very widespread. As such governance issues thwart the development of a competitive economy in Bangladesh. And Bangladesh can only ignore addressing these issues at its own peril. Business as usual will take Bangladesh nowhere as has been exemplified by the mega projects implemented under the kleptocratic Hasina regime.

Bangladesh ranks 131st out of 167 countries in the Economic Complexity Index, indicating a less diverse economy. Bangladesh is ranked 143rd out of 195 countries in the world for nominal GDP per capita which is around US$2,651, making it a lower-middle-income country.

Trump tariffs now could be a defining moment for Bangladesh keeping in view the current state of the economy. A thorough reimagining of the economy could create new opportunities and spark a long-overdue economic transformation.​

 

[Saif]

Dhaka still tries for deal to avert tariff hike

Bangladesh is still trying for a deal to avert prohibitive tariffs on exports to the US market while President Trump, basking in “legislative victory”, Friday began delivering tariff-hike letters to countries. Commerce Sec

thefinancialexpress.com.bd

Trump begins tariff letter delivery
Dhaka still tries for deal to avert tariff hike
USTR to share Tariff Exemption Schedule with BD in tow days

Jasim Uddin
Published :
Jul 04, 2025 22:56
Updated :
Jul 04, 2025 22:56

Bangladesh is still trying for a deal to avert prohibitive tariffs on exports to the US market while President Trump, basking in “legislative victory”, Friday began delivering tariff-hike letters to countries.

Commerce Secretary Mahbubur Rahman said Thursday’s meeting proved to be “fruitful”.

Following that meeting the USTR is going to share the country’s Tariff Exemption Schedule with Bangladesh within two to three days - possibly by July 8 and 9.

Quoting USTR officials, the commerce secretary also expressed the hope that Bangladesh would be in a good position compared to its competitors on the USA market.

About President Trump’s reciprocal tariff finalisation before the schedule, the USTR representative replied “they do not hope so”, the secretary added.

Another commerce ministry official also hinted that “the deal with Bangladesh is likely to be delayed as the ongoing dialogue takes time”.

The officials also hope that the reciprocal tariffs may get another extension following the previous 90 days.

The commerce secretary was scheduled to fly for the US on July 6 (early morning), but he may need to reschedule his flight as the USTR is going to share a Tariff Exemption Schedule in coming days.

Talking with the FE, economist Dr Masrur Reaz said, “As per our knowledge, the big deal is highly focused on the USA’s internal tariffs.”

He hopes that it will not impact Bangladesh’s trade.​

 

[Saif]

US lowers Bangladesh tariff to 35% from 37%

Failure to secure a more favourable bilateral agreement by the Aug 1 deadline would be a significant blow to the country's export-oriented economy

www.thedailystar.net

US lowers Bangladesh tariff to 35% from 37%
Failure to secure a more favourable bilateral agreement by the Aug 1 deadline would be a significant blow to the country's export-oriented economy.

VISUAL: ANWAR SOHEL

The US has announced a plan to impose a 35 percent trade tariff on Bangladesh, a slight reduction from the 37 percent rate initially proposed, according to a Reuters report, as the August 1 extended deadline approaches.

While the new rate offers some relief, it falls well short of the 20 percent tariff that officials in Dhaka expected. The government has argued it deserves more favourable terms than competitors such as Vietnam, which recently secured a 20 percent rate.

A Bangladeshi delegation remains in Washington for last-ditch talks with the US Trade Representative's office.

Failure to secure a more favourable bilateral agreement by the deadline would see the 35 percent tariff imposed, a significant blow to the country's export-oriented economy.

President Donald Trump yesterday began telling trade partners -- from powerhouse suppliers like Japan and South Korea to minor players -- that sharply higher US tariffs will start on August 1, marking a new phase in the trade war he launched earlier this year.

The 14 countries sent letters so far, which included smaller exporters like Bangladesh, Serbia, Thailand and Tunisia, hinted at opportunities for additional negotiations while at the same time warning that any reprisal steps would be met with a like-for-like response.

Bangladesh's 35 percent tariff places it among the countries facing the highest rates in the latest round of US trade actions. In an identical letter sent to all 14 nations and released on his Truth Social platform, President Donald Trump warned against any retaliation.

Addressing Chief Adviser Muhammad Yunus, he wrote: "If for any reason you decide to raise your Tariffs, then, whatever the number you choose to raise them by, will be added onto the 35% that we charge."​

 

[Saif]

Bangladesh considers big-ticket US imports to counter steep Trump tariff hike

The interim government is considering new purchases of Boeing aircraft and military hardware from the United States in a bid to reduce the trade gap and avert the impact of a steep 35 percent supplementary tariff imposed by President Donald Trump. On Tuesday, Commerce Secretary Mahbubur Rahman sai

thefinancialexpress.com.bd

Bangladesh considers big-ticket US imports to counter steep Trump tariff hike

Published :
Jul 08, 2025 22:17
Updated :
Jul 08, 2025 22:17

The interim government is considering new purchases of Boeing aircraft and military hardware from the United States in a bid to reduce the trade gap and avert the impact of a steep 35 percent supplementary tariff imposed by President Donald Trump.

On Tuesday, Commerce Secretary Mahbubur Rahman said the move is part of Bangladesh’s strategy to expand government-level imports from the US in response to tariff pressures, bdnews24.com reports.

Speaking at the Secretariat, he said: “If the US relaxes some of the tariffs to boost trade, we’ll provide facilities to increase government procurement from them.”

He added, “Most of our national airline’s fleet consists of Boeing aircraft. Our infrastructure is also Boeing-compatible.

“We’re about to place orders for new planes and have been negotiating with Boeing accordingly.”

The previous Awami League government had committed to purchasing 10 large aircraft from France’s Airbus, but that plan has stalled under the new administration.

This marks the first time a senior official has indicated a shift back to Boeing.

Mahbubur also said Bangladesh would promote US cotton imports, which are already tariff-free, and prioritise American suppliers for government grain purchases.

He said, “This way we’ll expand US trade. Much of our military equipment — especially vehicles and hardware — already comes from the US.”

He clarified that “military hardware” refers primarily to armoured vehicles and support machinery, not weaponry. “There’s no pressure from the US.

“They’ve only asked that we give preference when buying. We’re fine with that.”

The announcement follows a letter from Trump to Chief Advisor Muhammad Yunus on Monday, confirming a 35 percent supplementary tariff on all Bangladeshi exports.

Trump had earlier announced steep duties on over 100 countries in April, including a 37 percent hike for Bangladesh.

Following protests, Yunus requested a three-month suspension and offered to reduce the trade deficit, which led to the current negotiations.

Despite Bangladesh announcing duty cuts on 626 products in its budget, the US reinstated a 35 percent hike, pushing average duties from 15 percent to 50 percent.

The blow is expected to hit Bangladesh’s garment industry hardest as the US is its largest export market.​

 

[Saif]

Doors yet open for talking reciprocal tariff parity

Keeping the doors yet open for possible tradeoff, the US has declared a slightly slashed 35-percent tariff on Bangladesh's products exported to the American market with effect from August 01. President Donald Trump cut 2.0 per cent from the previously proposed across-the-board tariff rate of 37 on

thefinancialexpress.com.bd

Doors yet open for talking reciprocal tariff parity
Trump declares 35pc tariffs on Bangladeshi imports, US president’s letter seeks tradeoffs in bilateral trade

FE REPORT
Published :
Jul 09, 2025 00:28
Updated :
Jul 09, 2025 00:28

Keeping the doors yet open for possible tradeoff, the US has declared a slightly slashed 35-percent tariff on Bangladesh's products exported to the American market with effect from August 01.

President Donald Trump cut 2.0 per cent from the previously proposed across-the-board tariff rate of 37 on imports from Bangladesh, suggesting in his letter to the head of Bangladesh's interim government, Prof Yunus, a rethink on 'tariff and para-tariff barriers' facing US products.

Trump wrote to the interim chief in the letter, dated July 7, "Our relationship has been, unfortunately, far from Reciprocal. Starting on August 1, 2025, we will charge Bangladesh a Tariff of only 35 per cent on any and all Bangladeshi products sent into the United States, separate from all sectoral Tariffs."

He offers that there will be no tariff if Bangladesh, or companies within the country, decide to build or manufacture product within the United States. And, "in fact, we will do everything possible to get approvals quickly, professionally, and routinely -- in other words, in a matter of weeks".

Trump writes they look forward to working with Bangladesh as trading partner for many years to come. "If you wish to open your heretofore closed Trading Markets to the United States, and eliminate your Tariff, and Non-Tariff, Policies and Trade Barriers, we will, perhaps, consider an adjustment to this letter."

These tariffs may be "modified, upward or downward, depending on our relationship with your Country. You will never be disappointed with The United States of America."

On April 02, the Trump administration had announced an additional tariff of 37 per cent. It was supposed to be made effective from April 09 last.

After request from different countries, including Bangladesh, White House announced a 90-day pause on the Reciprocal Tariff Policy on April 9, 2025. The suspension was supposed expire today (9 July, 2025).

But, instead, will expire on August 01, 2025. After extension of the timeframe, Bangladesh will get three weeks for more, in-depth, negotiations and fixing its position on the newly imposed tariff rates, according to the commerce ministry.

The newly imposed rate is higher than that of Bangladesh's RMG-export rival Vietnam as Donald Trump has more than halved the additional tariffs for Vietnam from 46 per cent to 20 per cent.

In this regard, the US administration has also sent letters -- undersigned by Trump -- to the leaders of other countries, too.

A meeting for second thoughts on the predated across-the-board 35-percent tariffs is expected to be held on July 10-11 in the morning of US time between the visiting Bangladesh delegation and the US trade officials.

National Security Adviser under the post-uprising government Khalilur Rahman and Commerce Adviser Sk Bashir Uddin are expected to join the last-ditch negotiations as they are staying in the USA to deal with the tariff issue. Commerce Secretary Mahbubur Rahman is supposed to fly for Washington and join the crucial meeting.

Contacted Tuesday, the commerce secretary said, "The commerce adviser confirmed us that the US has given Bangladesh time for July 9, 2025 to discuss the tariff issue."

Replying to a question, Mr. Rahman said "we have received a new draft agreement which totally different than previously received draft sent by the US administration.

He, however, said "we will have to work for fixing the Bangladesh position on the tariff issue and draft agreement."

Replying to another question on the new draft agreement, he said Bangladesh's exporters have to follow standard of the U.S. Food and Drug Administration (FDA) in exporting different items to the US market. Besides, necessary certification would be required in exporting pharmaceutical items.

He also mentioned that Bangladesh's RMG is now under "general tariff line". He wouldn't elaborate.

The National Security Adviser and the Commerce Adviser of Bangladesh already had a meeting with the United States Trade Representative (USTR) representatives on July 3. The meeting ended without decision.

On April 02, the Trump Administration announced the imposition of reciprocal tariffs on all US trading partners. Bangladesh currently pays an average of 15 per cent in tariffs on exports to the US market. The Trump administration announced an additional tariff of 37 per cent, bringing the total to a prohibitively steep 52 per cent.

After the levying of reciprocal tariffs, Chief Adviser of Bangladesh interim government and other nations wrote to the US administration to postpone the punitive tariffs that touched off global trade jitters.

The commerce adviser also wrote to the USTR outlining Bangladesh's trade action plans and commitments in greater detail in order to leapfrog the impending crisis.

"Considering that US buyers can try to pass the tax burden on to Bangladeshi exporters, and likewise, Bangladeshi exporters may try to shift the burden on to U.S. buyers, there is a risk that U.S. buyers may divert orders to countries with lower tariff exposure, potentially undermining Bangladesh's position as world's second-largest RMG exporter," Bangladesh Foreign Trade Institute (BFTI) feared in its previous report.

To be continued.....................​