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

[Saif]

Facing an uphill battle over Trump tariffs

In the light of the latest US tariff salvo on Bangladesh exports, questions are being raised over what Bangladesh can realistically offer to lower the steep duties imposed by the Trump administration. Although US officials have said that negotiation channels remain open for discussions on reciproca

thefinancialexpress.com.bd

Facing an uphill battle over Trump tariffs

Wasi Ahmed
Published :
Jul 15, 2025 22:56
Updated :
Jul 15, 2025 22:56

In the light of the latest US tariff salvo on Bangladesh exports, questions are being raised over what Bangladesh can realistically offer to lower the steep duties imposed by the Trump administration. Although US officials have said that negotiation channels remain open for discussions on reciprocal tariff parity, prospects of a significant turnaround appear slim, under the circumstances.

Following the imposition of a 37 per cent reciprocal tariff on April 3, Bangladesh proposed to lower import duties on a range of US-origin products. However, the move evidently fell short of meeting the Trump administration's expectations. A subsequent revision of the proposed sectoral tariff to 35 per cent also failed to shift the dynamics. For Bangladeshi exporters, who already face around 15 per cent tariff when shipping to the US -- the country's largest export destination-the newly announced 35 per cent surcharge would take the total duty to 50-51 per cent, effective from August.

Finance Adviser Dr. Salehuddin Ahmed, speaking to the press following the announcement, stated that the proposed 35 per cent tariff was not yet final and that a resolution could still be achieved through direct bilateral negotiations. Meanwhile, the Commerce Adviser, who led a small delegation for talks with the USTR earlier this week, informed the media yesterday that some time had been secured from the U.S. side to work towards a mutually acceptable position. It remains to be seen what strategic options Bangladesh has at its disposal to steer the situation in its favour.

What has complicated matters is the comparative advantage granted to Vietnam -- a key competitor in the garment sector -- which has secured a flat 20 per cent tariff on its exports to the US. This gives Vietnam a pronounced edge over Bangladesh in the American market. The trade imbalance between Bangladesh and the US currently stands at approximately $6.2 billion, while Vietnam's trade surplus with the US is a staggering $125 billion. Yet, Washington has agreed to a favourable deal with Hanoi. One likely reason is the US-Vietnam agreement that pairs the 20 per cent tariff on garments with zero-duty access for American goods into Vietnam. Additionally, while transshipment of Chinese goods through Vietnam would attract a 40 per cent tariff, this still undercuts the rates Bangladesh might face if negotiations collapse.

Other countries such as Indonesia and South Africa also appear to have struck more favourable terms than Bangladesh. Among the 14 countries listed in the latest US tariff announcements, only four are in a weaker position. Some observers argue that Bangladesh government squandered the three-month window following the initial April announcement to negotiate a better outcome. Professor Mustafizur Rahman, distinguished fellow at the Centre for Policy Dialogue (CPD), has voiced disappointment, noting that although Bangladesh was the first to begin discussions with the USTR, the outcome has been disappointing. He pointed out that negotiations have only managed a 2-percentage point reduction in the additional tariff -- an outcome that could severely damage export competitiveness.

This raises a critical question: what, if anything, can Bangladesh offer to further reduce the tariff to a more reasonable level? If, as speculated, the US is seeking to increase its exports of aircraft, cotton, food grains, LNG, and military hardware to Bangladesh in a bid to bridge the trade gap, is Dhaka prepared to respond affirmatively or take steps in that direction?

In 2024, Bangladesh exported about $8.4 billion worth of goods to the US, of which $7.34 billion came from the readymade garment sector. On the other hand, US exports to Bangladesh stood at just $2.2 billion, leaving a trade gap of $6.2 billion. Would a pledge from Bangladesh to import more American goods suffice? Could the government consider granting zero-tariff access to US exports across the board?

The Vietnam deal is attractive on paper. But the fact remains Vietnam cannot meet the total demand for garments in the US. Bangladesh, unlike Vietnam, has pursued negotiations under a multilateral framework, hoping to secure lower duties based on WTO's Most Favoured Nation (MFN) principles. However, the US appears more inclined towards bilateral deals that blend trade considerations with strategic partnerships.

If the worst-case scenario unfolds and Bangladesh is subjected to an effective tariff rate exceeding 50 per cent, many suppliers -- who currently export between 40 and 80 per cent of their output to the US -- could be pushed to the brink. With profit margins in the apparel industry already wafer-thin and operational costs steadily rising, such a tariff hike would make it increasingly difficult for many exporters to sustain their businesses. At the current 15 per cent rate, the apparel sector already pays over $1.0 billion annually in tariffs. A hike to more than 50 per cent could result in significantly higher losses -- not just for Bangladeshi exporters, but also for US brands and consumers. Higher costs at the retail end could trigger inflationary pressures and supply chain disruptions.

It is important to recognise that this is not just a trade negotiation -- it is entangled with geopolitics. The limited political engagement between Dhaka and Washington may be working against Bangladesh's interests. Without closer ties to the Trump administration's core political constituencies, trade negotiations alone may not suffice. Bangladesh must urgently recalibrate its strategy. This includes leveraging US-based lobby groups, engaging American retailers, and reaching out to sourcing associations who rely on Bangladeshi goods. Business diplomacy needs to work in tandem with traditional diplomacy to navigate this complex situation.

At a time when global trade dynamics are shifting and geopolitical alliances are reshaping trade policies, Bangladesh cannot afford to be reactive. The stakes are high, and the time to act decisively is now.​

 

[Saif]

Bangladesh’s 801 export-oriented enterprises at high risk

More than 800 Bangladeshi export-oriented enterprises may face a significant amount of risk following the United States’ announcement of reciprocal tariffs on goods produced in Bangladesh. Exporters warn that unless the additional tariffs are negotiated and reduced, exports to the US could face...

en.prothomalo.com

Trump’s tariff
Bangladesh’s 801 export-oriented enterprises at high risk

Masud MiladChattogram
Published: 09 Jul 2025, 12: 27

Containers at Chittagong Port Prothom Alo file photo

More than 800 Bangladeshi export-oriented enterprises may face a significant amount of risk following the United States’ announcement of reciprocal tariffs on goods produced in Bangladesh. Exporters warn that unless the additional tariffs are negotiated and reduced, exports to the US could face serious setbacks.

US President Donald Trump on Monday announced a 35 per cent reciprocal tariff on Bangladeshi goods, which is set to come into effect from 1 August. This declaration has sparked concern among more than 2,000 Bangladeshi exporters with active trade links to the US.

Many of those firms also export to other countries. However, a number of them rely solely on the US market for their shipments.

An analysis of data from the National Board of Revenue (NBR) reveals that as many as 2,377 companies exported 1-100 per cent of their products to the US during the 2024–25 fiscal year. Among them, 801 companies sent more than 50 per cent of their total exports to the US, making them particularly vulnerable due to their overreliance on a single market.

Collectively, those 801 companies exported USD 6.62 billion (662 crore) worth of goods globally last fiscal year. Of which USD 5.05 billion (505 crore), or 58 per cent, of Bangladesh’s total exports went to the US.

Bangladeshi goods are already subject to tariffs 10–15 per cent higher than those from competing countries. This effectively means we are going to lose the US market. Buyers from the US are also already worried.

Mohammad Abdus Salam, managing director of Chattogram-based Asian & DAF Group
In total, Bangladesh exported goods worth USD 8.76 billion (876 crore) to the United States in the last fiscal year, including USD 7.59 billion (759 crore) in ready-made garments alone.

Garment sector faces the greatest threat

Chattogram-based Fortune Apparels, located in Nasirabad, exported garments worth USD 33.7 million (3.37 crore) last fiscal year, all of that was to the United States. Fortune Apparels is a sister concern of the Asian & DAF Group.

Speaking to Prothom Alo, Mohammad Abdus Salam, managing director of the group, said Bangladeshi goods are already subject to tariffs 10–15 per cent higher than those from competing countries. This effectively means we are going to lose the US market. Buyers from the US are also already worried. “If the tariffs aren’t reduced, they will move their sourcing elsewhere.”

Fortune Apparels is one of 168 companies that export exclusively to the US. If the new tariff takes effect, these firms could face existential threats, industry leaders warn.

Even companies that export the majority of their products to the US are also in a precarious position. One such firm is Independent Apparels, also based in Nasirabad of Chattogram. In the last fiscal year, 89 per cent of its exports were destined for the US.

Aside from garments, Bangladesh exports footwear, headgear, tents, bags, furniture, and food products to the US. Of the exporting companies, 176 were entirely dependent on the US market last fiscal year.

Speaking about this, Independent Apparels Ltd. managing director SM Abu Tayeb said, “We’ve been working with US buyers for nearly three decades. Retail giants like Walmart have put their trust in us. But if we must pay an additional 35 per cent on top of the existing 15 per cent tariff, totalling 50 per cent, then US buyers will no longer be interested in sourcing from Bangladesh. We’re looking to the 9 July bilateral meeting with the US (for a solution).”

BGMEA (Bangladesh Garment Manufacturers and Exporters Association) first vice-president Selim Rahman observed that there could be risks in the alternative markets to the US.

He noted, “Enterprises heavily dependent on US exports are at serious risk. If exports to the US are disrupted, everyone will flock to alternative markets. This situation will make the alternative markets highly competitive. Exporters won’t receive fair prices.”

Other sectors also under threat

Aside from garments, Bangladesh exports footwear, headgear, tents, bags, furniture, and food products to the US. Of the exporting companies, 176 were entirely dependent on the US market last fiscal year. Among 703 exporters, 319 companies sent more than 50 per cent of their goods exclusively to the US.

Masud Agro Processing Food Products Ltd., located in Karnaphuli, Chattogram, is one such company. Its managing director Ashraf Hossain said, “We’ve been exporting frozen food and other items to the US for 13 years. When reciprocal tariffs were first announced three months ago, our US buyers temporarily suspended orders. Now, Trump’s latest declaration has reignited that uncertainty.”

Bangladesh’s exports to the US had been steadily increasing in recent years. Economists and researchers now warn that reciprocal tariffs could halt that momentum.

However, they also emphasised that there is still room for negotiation. If Bangladesh can engage in effective diplomacy and reduce the additional tariffs, especially in comparison to competitor countries, it may not only preserve but also expand its presence in the US market.

On the other hand, they maintained, if Bangladeshi products continue to face higher tariffs than those from rival exporters, the country could gradually lose access to the US market. This may have far-reaching implications for the national economy.​

 

[Saif]

Strategies we can employ in tariff talks with the US

We must realise that the US has started the tariff war with a political agenda.

www.thedailystar.net

Strategies we can employ in tariff talks with the US

Since the US has imposed only 20 percent tariffs on Vietnamese goods, naturally, Bangladesh may lose a large part of the US RMG market to Vietnam. VISUAL: MAHIYA TABASSUM

The United States has announced that as of August 1, 2025, it will impose an additional tariff of 35 percent on goods imported from Bangladesh. The US President Donald Trump has communicated this decision in a letter to the chief adviser of the interim government, Prof Muhammad Yunus. This happened while the Bangladesh-US tariff negotiations were still on. The letter hinted that if Bangladesh further opens up its markets to US goods and services by removing tariff and non-tariff barriers, the US may reconsider some of the issues raised in the letter. The recently announced tariff rate of 35 percent is lower than the originally announced 37 percent. However, given that the existing average tariff for Bangladesh is already 15 percent, with a 35 percent increase, the effective tariff rate for Bangladesh will be 50 percent.

Such a high US tariff on products from Bangladesh will significantly impact the Bangladesh economy. The US is the single largest market for goods exported from Bangladesh. During the 2024-25 fiscal year, Bangladesh exported $8.4 billion worth of goods to the US market, which represents 18 percent of the total Bangladeshi goods exports. About 2,377 manufacturing houses were associated with export to the US market. The US announcement of a tariff increase may put more than 800 exporting units under serious existential risk. It is feared that the announced tariff increase by the US may adversely impact Bangladesh's macroeconomy significantly.

In Bangladesh, more than 87 percent of the goods exports are RMG, and about 1,821 manufacturing units export these goods. It is a major source of foreign exchange earnings for the country. Bangladesh has been earning more than $4 billion from RMG exports every year since 2000. The sector employs more than four million workers, 80 percent of whom are women. Therefore, with the announced tariff hikes, foreign exchange earnings from RMG exports may go down. It may also lead to job cuts in the RMG sector, as some of the production units will face closures. It goes without saying that the smaller factories will bear the brunt of the adverse impacts of the tariff hikes, and the female workers may be the worst victims of factory closure. The latter will have wider socio-economic and cultural dimensions.

In global RMG exports, Bangladesh holds the second position, next to China. But Vietnam has already emerged as a strong competitor of Bangladesh in RMG exports. Since the US has imposed only 20 percent tariffs on Vietnamese goods, naturally, Bangladesh may lose a large part of the US RMG market to Vietnam.

This raises several questions. For example, the issue of higher tariff rates has been talked about since last April. What could Bangladesh have done to lower the tariff rate to the level of that of Vietnam? Did we not understand the importance of the issue, or did we not have enough preparations to tackle it? Also, did we fail to foresee that such things could happen?

Different quarters have diverse views on these questions, from which five strands of thought can be synthesised. One, the government did not approach the problem with the importance or with the level of consideration this multidimensional issue deserves. There was also a lack of strategic thinking. Many observed that government officials were engaged in the process in isolated manners, and coordinated efforts were absent. Two, the private sector was allegedly kept in the dark and was not included in the process of negotiations. Similarly, lobbyists, who often play a critical part in such negotiations, were not employed. Three, many experts have expressed concerns about whether Bangladesh has fully realised the political dimensions of the tariff issue and its importance in the tariff war. For example, the US has been putting additional pressure on countries that have huge Chinese investments in their territories or have stronger ties with China. Perhaps this factor has worked against Bangladesh in realising additional benefits from the US.

However, there is still time for further negotiations, and if that opportunity is used efficiently and effectively, some additional benefits may be realised in the context of the increased US tariffs. Some points are important in that respect.

First, Bangladesh must understand the US position. For example, we must realise that the new US administration will no longer accept the structure of the World Trade Organization (WTO) and respect the accepted rules and regulations of international trade. Therefore, to raise those issues in trade negotiations with the US is meaningless. Bangladesh must assess what the real outlook and motives of the US are and formulate its trade negotiations strategy accordingly.

Second, since the US has been talking about reducing its trade deficits, Bangladesh may explore which US products we can potentially import in higher quantities. The country has already put some proposals in that respect, which may be re-evaluated. The mutual negotiations must also focus on the potential tariff benefits that Bangladesh may get if it provides some trade benefits to the US. Lobbyists may be employed to move this agenda forward.

Third, we must realise that the US has started the tariff war with a political agenda. We must find out that, in the context of that agenda, what considerations and outlook the US holds for Bangladesh. Those issues must be brought to the discussion table, as politics plays a role along with trade benefits. Both Cambodia and Vietnam have used it to get tariff exemptions.

Fourth, in trade negotiations, the importance of alliances with other countries can hardly be overemphasised. Negotiations may be bilateral, but positions taken must be collective.

Finally, more Bangladeshis, who have expertise in international negotiations and are familiar with the processes of trade deals, should be brought to the negotiation table. Such discussions and negotiations have a particular verbal and body language. Familiarity with those and using them in the Bangladesh-US tariff and trade negotiations is essential. Efficient and effective use of these trade negotiation strategies is likely to help Bangladesh realise additional benefits in tariff talks with the US.

Selim Jahan is former director of the Human Development Report Office under the United Nations Development Programme (UNDP) and lead author of the Human Development Report​

 

[Saif]

US tariff hike to shake entire economy, not just exports

A steep 35 percent tariff on Bangladeshi garment exports to the United States would affect far more than the country’s $8 billion annual shipments, according to economists and business leaders.

www.thedailystar.net

US tariff hike to shake entire economy, not just exports
Entrepreneurs, economists tell The Daily Star roundtable

In the long term, establishing supply chains outside China could be good for Bangladesh and will create opportunities in garment and textile supply chain. But in the short term, it's a real challenge — Kihak Sung Chairman of Youngone.

A steep 35 percent tariff on Bangladeshi garment exports to the United States would affect far more than the country's $8 billion annual shipments, according to economists and business leaders.

Rather, they said at a roundtable yesterday that the fallout would ripple through the entire economy, from fabric and accessories suppliers to banks and insurers.

We must meet the USTR's requirements. This is not merely a misunder- standing, it's about proactive engagement. As long as we keep discussions open, we can find solutions — AK Azad Chairman Ha-Meem Group.

"Here, our stakes are far higher than the headline $8 billion export figure from Bangladesh to the US," said AK Azad, chairman and CEO of Ha-Meem Group, which exports clothing to America.

Referring to ongoing negotiations with the Trump administration and the looming deadline of August 1, when the new rates are expected to take effect, he said, "If we lose, the entire ecosystem will be affected — fabric suppliers, textile mills, spinning mills, accessories manufacturers, banks, insurance companies — the whole economy."

The roundtable was organised by The Daily Star at its auditorium in the capital.

Other industry leaders expressed similar concerns at the programme. Several said that the higher duties could also affect Bangladesh's position in other markets, such as Europe and Australia, by increasing competition and pushing down prices.

Rubana Huq, a former president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), echoed Azad's concern, saying the impact would not be confined to shipments bound for the US, Bangladesh's single largest export destination.

"It is not an exaggeration, it's a serious possibility. The GDP could drop by at least 1 percent if things proceed as they are now," she commented.

Until recently, Bangladesh had been paying around 16 percent duty on garments entering the US. That changed in early April, when the US announced a reciprocal tariff of 37 percent. The effect was paused for 90 days, while the revised rate of 35 percent was announced in early July.

This is scheduled to come into effect on August 1. The rate is still much higher than the 20 percent Bangladesh had hoped for.

Huq said uncertainty over the new tariff has already disrupted trade, with US buyers rushing to place orders before the rate takes effect.

"In the first five months alone, exports to the US reached $3.38 billion, due largely to this frontloading trend. Buyers are nervous; they simply don't know what's coming," she said.

"This is not just about big business. It is about millions of workers. It is about real lives. Respecting the NDA shouldn't come at the cost of losing jobs, shrinking investment, or undermining the very sector that drives our economy," said the former BGMEA president.

The discussion was moderated by Arun Devnath, deputy editor of The Daily Star.

If the new tariff is slightly higher but still ensures a level playing field, that is acceptable. But ideally, we want it to be at least 10 percent lower than our competitors to remain competitive — Mahmud Hasan Khan , President of BGMEA.

At the event, Mahmud Hasan Khan, president of the BGMEA, said, "If the new tariff is slightly higher but still ensures a level playing field, that is acceptable. But ideally, we want it to be at least 10 percent lower than our competitors to remain competitive."

"Factories that export 40 percent or more to the US may face severe losses, and some may shut down entirely. This would lead to massive worker displacement and significant economic challenges," he said.

He added that while some factories may shift focus to Canada, Japan or Australia, doing so could flood those markets and trigger price drops.

If the US market shrinks, that will be a challenging thing for us. Other market will also feel the pressure. The price pressure is going to be huge-— MA Razzaque Chairman of RAPID.

Mohammad Abdur Razzaque, chairman of the local think tank Research and Policy Integration for Development (RAPID), pointed out that the overall effect would be contraction of the US market.

"Most exporting countries are going to see tariffs being imposed, so overall tariffs in the US market will increase, and that is going to reduce the US market size. That's quite natural," he said.

He cited US trade data showing that the country imported $84 billion worth of garments last year.

"If, on average, 20 percent tariffs are imposed on major suppliers, including Bangladesh, then the US market could shrink by $16 billion," he commented.

A smaller US market would intensify competition elsewhere, especially in Europe, where Bangladesh has a strong presence. "Price pressure is going to be huge," Razzaque added.

We are being told to be patient — and yes, patience might work in theory. But for our small and medium factories, it is a matter of survival-— Fazlul Hoque Managing, director of Plummy Fashions.

Fazlul Hoque, managing director of Plummy Fashions Ltd, a knitwear exporter, said nearly 900 factories currently export to the US. If large exporters lose business, they would target the EU to make up for lost volume, disrupting the market for everyone.

"We are being told to be patient. And yes, patience might work in theory. But for small and medium factories, it is a matter of survival."

Hoque said, "Six months might be manageable for big factories, but for smaller ones that depend heavily on the US, it could be a death sentence."

Hoque, a former president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), called for a unified taskforce to assess the post-tariff situation and devise a response.

He said, "If, on August 1, we find ourselves facing the full global duty structure from the US, it will clearly place Bangladesh at a disadvantage. Even if we are currently on par with our competitors, an increase in duties for the rest of the world will inevitably reduce the overall market size in the US. As a result, Bangladesh is likely to lose market share there."

"We need to identify solutions and strategies to face these immediate challenges. Of course, there are mid-term and long-term issues, but the priority now is ensuring that all suppliers can survive and continue competing in the export market," added Hoque.

Azad of Ha-Meem Group argued that relying on World Trade Organization (WTO) rules will not help. "First, we have to win this negotiation. If we lose compared to India, Pakistan, and neighbouring countries, we will lose our business."

He urged the government to act before the deadline. "If duties are imposed — 50 percent or even 35 percent on top of existing tariffs — customers will not continue to buy from Bangladesh," he added.

Brands, Azad said, had made it clear they would not raise retail prices or absorb additional costs.

Azad also cited difficulties with sourcing yarn locally and fulfilling conditions set by the US Trade Representative. "We must satisfy the USTR's requirements. This is not merely a misunderstanding; it is about proactive engagement. As long as we engage informally and keep discussions open, we can find solutions."

We need a decisive deal before August 1. If we lose $8 billion in business, that could mean loss of 800,000 to one million jobs -- with devastating social consequences-— Lutfe M Ayub Chairman of Fountain Garments.

Lutfe M Ayub, chairman of Fountain Garments Manufacturing Ltd, said his company sends half of its production to the US and the rest to the EU. Buyers, including Walmart and other major brands, are in "wait and see" mode.

"This waiting period could cost us several idle months, a difficult situation for our factories," he mentioned.

"If we lose $8 billion in business, that could mean 10 lakh jobs lost, with devastating social consequences."

"We need to act for our security, our economy, and our future. The government and private sector must work hand in hand to secure a deal that protects our economy and our people," he added.

"Yesterday, I requested the BGMEA president to engage with major American retailers and brands. Those brands have invested heavily in Bangladesh and cannot easily shift production to countries like India or Cambodia," Ayub said.

He warned that if things go wrong, he might be among the first to shut shop.

Bangladesh should have a team of experts in place including negotiators and practitioners from both public and private sectors-— Iftekhar Ahmed Chowdhury, Former adviser of caretaker govt.

Former foreign affairs adviser Iftekhar Ahmed Chowdhury called for an expert team of negotiators drawn from both the public and private sectors.

He cautioned against overreacting to the China factor. "China is emerging as a powerful actor in its own right. We must not create a situation whereby we attract Chinese retaliation and thereby jump from the frying pan into the fire."

In the first five months alone, exports to the US reached $3.38 billion, largely due to the frontloading trend. Buyers are nervous—they simply do not know what’s coming.Rubana Huq, Former president of BGMEA.

Chowdhury said Pakistan had managed to balance competing interests, and Bangladesh should do the same.

"We should reduce single-country dependency while spreading procurement and production across multiple locations."

"All in all, it is obvious that we in Bangladesh have a hill to climb. It is also obvious that waiting will not make it any smaller," he added.

M Masrur Reaz, chairman of local think tank Policy Exchange Bangladesh, said the country had little time but should still focus on damage control, recovery, and realignment.

"We have to work in crisis mode, in emergency mode. Because this is an existential issue for our economy."

Offering tariff concessions to the US may not work, said the economist, since imports are private sector-driven. Instead, Bangladesh should explore strategic partnerships based on broader US interests, such as in energy, agriculture, and aviation.

"The US oil and gas lobby is extremely powerful. Bangladesh needs gas. Can we strike better exploration deals? The US agri-lobby is perhaps more influential than the auto or healthcare lobby. They have an interest in cotton, wheat, and soybeans — all of which Bangladesh can absorb more of as our economy evolves."

"We may be hoping for 20 percent, but we may end up at 35 percent or even 40 percent. With Trump as the final decision-maker, anything is possible," added the economist.

Kihak Sung, chairman of Youngone Corporation, urged Bangladesh's business community to act together and diversify markets beyond traditional destinations.

"Many companies in Bangladesh still rely heavily on raw materials and components imported from China. In the long term, establishing supply chains outside China could be good for Bangladesh. But in the short term, it is a real challenge," he said.

He appealed to trade negotiators to push for a grace period. "If they could negotiate an implementation period of at least six months, it would help companies still dependent on Chinese fabrics and components to do alternative sourcing," he commented.​

 

[Saif]

Ministries preparing coordinated response

Government ministries are preparing coordinated response to resolve the deadlock related to bumped-up US tariffs on Bangladeshi exports as the deal offered by Washington is tied with some conditions beyond trade realms, sources say. The government will finalise its decision on the critical condi

thefinancialexpress.com.bd

US tariff package bound with non-tariff strings
Ministries preparing coordinated response

FE REPORT
Published :
Jul 17, 2025 00:04
Updated :
Jul 17, 2025 00:04

Government ministries are preparing coordinated response to resolve the deadlock related to bumped-up US tariffs on Bangladeshi exports as the deal offered by Washington is tied with some conditions beyond trade realms, sources say.

The government will finalise its decision on the critical conditions for reducing tariff rates on eliciting opinions from relevant ministries as a decisive third round of negotiations with the United States Trade Representative (USTR) is ahead.

Commerce Secretary Mahbubur Rahman apprised journalists Wednesday of the process of preparation following an inter-ministerial meeting -- as businesses in Bangladesh, especially the export-centric apparel industry, remained on tenterhooks.

He said, "In our ongoing discussions with the United States on the tariff issue, various ministries are involved. Hence, we are gathering their opinions. Once we have them, a final proposal will be prepared and sent for further discussions with the US side."

Regarding the third round of negotiations, the Commerce Secretary mentions that the US has not yet provided a specific date. "We are in communication with them about when the next course of action will begin."

The top trade official mentions that Bangladesh is importing many items, including food-grains, and each product is subject to separate regulations. "We are currently evaluating these."

Following the three-day second round of discussions with the US, the Ministry of Commerce held inter-ministerial meetings after returning to the country last Sunday.

As part of this painstaking process, the inter-ministerial meeting held at 11am Wednesday drew representatives from 11 ministries, including Finance, Agriculture, Food, Environment, and Energy. Officials from the National Board of Revenue (NBR) and Bangladesh Trade and Tariff Commission also attended the meeting with Commerce Adviser Sheikh Bashir Uddin in the chair.

Sources say the US conditions binding reducing in steep tariffs -- lastly set at 35 per cent -- were reviewed, and relevant ministries were asked to provide their comments.

Similar meetings will be held with other ministries concerned, too, as the US-set dos for Bangladesh reportedly overreach trade relations.

And these tags are cloaked in a 'Nondisclosure Agreement' reached by the two governments.

Bangladesh's representatives will have to provide feedback on the US conditions during the third round of talks. Before that, a final decision will be submitted to Chief Adviser of the post-uprising interim government Dr Muhammad Yunus.

After Wednesday's meeting, Commerce Secretary Mahbubur Rahman said, "This is a process. We need to gather opinions from different ministries as many issues are involved."

He adds, "These meetings will continue. After consolidating feedback from the ministries, we will finalise a proposal and proceed with further discussions."

Asked whether a date has been confirmed for the third-round negotiations with the US, the Secretary said, "They have not given a specific time yet. We are maintaining communication."

Asked about the specific issues discussed in the meeting, he said, "We import several products from the US, including food items. Various laws and regulations apply in this regard, and we have sought clarification from the relevant ministries."

"This is a global issue," he continues. "We are following the same procedures that countries around the world follow."

It is also understood that while there is broad consensus on trade-related matters, several non-trade issues remain unresolved in the negotiations between Bangladesh and the US. However, when asked if any such issues were discussed in Wednesday's meeting, the Commerce Secretary parried the query.
​

 

[Saif]

Time is running out for a deal with the US

Govt should have been better prepared and more proactive

www.thedailystar.net

Time is running out for a deal with the US
Govt should have been better prepared and more proactive

VISUAL: STAR

The concerns raised by trade experts and private-sector representatives regarding the interim government's handling of the US tariff negotiations are quite justified. At a roundtable organised by this daily, they expressed frustration over the government's poor preparation, lack of transparency, and minimal private-sector involvement in the trade talks with the US. They warned that a steep 35 percent tariff on Bangladeshi exports including garments to US markets—scheduled to come into effect from August 1—would have greater ramifications for the apparel sector and the wider economy than the government appears to realise. The lack of urgency displayed by it in the face of this enormous threat, and the limited progress made as time runs out to conclude the negotiations, has therefore placed our economic future in a precarious position.

Dhaka is now preparing for a third round of negotiations with the US, but it remains unclear when the talks will take place. While other countries, including our direct trade competitor Vietnam, have either already secured a favourable deal or made significant progress in that direction, Bangladesh still seems to lack any concrete plans. Until recently, the government kept the private sector largely at arm's length. And with very little time left before August 1, how much of the sector's input it can incorporate remains a major question. What the government should have done is establish both a steering committee and a working committee to ensure stakeholder inclusivity and proper preparation.

Moreover, inter-ministerial issues relating to the negotiations also appear to remain unresolved. At this stage, it is not even clear who exactly is leading the talks on Bangladesh's behalf. According to experts, the uncertainty surrounding a deal may prompt buyers to adopt a "wait and see" approach when considering orders from Bangladesh. This could leave businesses idle for several months. Small and medium-sized enterprises, in particular, will struggle to absorb such losses, potentially leading to factory closures and significant job losses.

The uncertainty triggered by the threat of harsher US tariffs will likely have spillover effects in other markets as well. Garment suppliers from other countries may also move quickly to capture European and other export markets, posing further risks to Bangladesh's market share.

Bangladesh, being heavily dependent on garment exports, has always been vulnerable to such external shocks. Despite repeated warnings, little has been done over the years to diversify the export basket, resolve longstanding structural bottlenecks, and enhance overall competitiveness. Given the current global trade landscape, experts believe Bangladesh now has no choice but to reduce trade and business costs through improved logistics and a more enabling business environment, while also boosting productivity through investments in technology and skills development.

However, such changes cannot be achieved overnight—they require consistent, long-term commitment. In the meantime, what the government must urgently do is bring all stakeholders on board and use all possible diplomatic and institutional channels to secure a win-win deal with the US.​

 

[Saif]

Govt plans to include private sector in US tariff talks

The government is considering bringing private sector representatives on board for upcoming tariff negotiations with the United States, as Bangladesh prepares to respond to the proposed tariff schedules by Sunday or Monday next week.

www.thedailystar.net

Govt plans to include private sector in US tariff talks
Move comes as third round of negotiations looms

The government is considering bringing private sector representatives on board for upcoming tariff negotiations with the United States, as Bangladesh prepares to respond to the proposed tariff schedules by Sunday or Monday next week.

The US Trade Representative (USTR), which leads trade talks for Washington, has already sent Bangladesh three detailed tariff schedules.

Bangladesh is currently reviewing the proposals and will send a response within the next couple of days, Commerce Secretary Mahbubur Rahman told The Daily Star yesterday over the phone.

"As the tariff issue includes multiple ministries, the commerce ministry has called an inter-ministerial meeting on Saturday to approve the agreed tariff lines submitted by the USTR," he said.

Rahman added that Bangladesh had agreed on most of the tariff issues but declined to elaborate, citing the non-disclosure agreement (NDA) signed by both sides before the talks began.

He also refrained from commenting on non-tariff matters that had been discussed, saying they too fall under the NDA.

However, the secretary said the ministry plans to involve private sector stakeholders in the negotiations. "We will be reaching out to business leaders from leading chambers and trade bodies," he said.

The commerce secretary did not disclose how many products the US had sought to be granted zero-duty access to the Bangladeshi market, but mentioned that the number is far lower than Bangladesh's total list of 7,446 tariff line items.

No new date has yet been set for the third round of talks, which is scheduled to take place in Washington before August 1, when the new import duties imposed by the Trump administration are due to take effect.

The commerce secretary said he would formally request the USTR to set a fresh date for the talks after Saturday's inter-ministerial meeting finalises Bangladesh's position on the zero-duty proposals.

Earlier this week, after returning from the second round of talks in the US, Commerce Adviser Sk Bashir Uddin and Mahbubur Rahman told a press conference that Bangladesh was preparing for the third round and that a team would fly to Washington next week.

However, the names of the delegation members have not yet been made public.

Meanwhile, economists and exporters are warning of serious repercussions for Bangladesh's economy due to the Trump administration's additional 35 percent reciprocal tariff on Bangladeshi goods.

They predict that overall US apparel imports could fall from nearly $80 billion last year to between $65 billion and $70 billion this year, as higher tariffs discourage sourcing from affected countries.

This could spell trouble for Bangladesh, especially its garment exports to the US, which may take a hit as American retailers and brands scale back their imports due to the steeper costs.

In contrast, the country's market competitors like Vietnam, India, and Indonesia have been hit with much lower rates, which may affect Bangladesh's garment share in the American market.

Bangladesh currently holds a 9.2 percent share of the US apparel market, making it the third-largest supplier after China and Vietnam. Last year, the country exported $8.2 billion worth of garments to the US.

Shovon Islam, managing director of Sparrow Group, which exports $350 million worth of garments a year—$150 million of which goes to the US—said his American buyers are already pressing him to cut prices, even though the final tariff rate is yet to be confirmed.

He said that he had to offer much lower prices to secure an order of one million shirts, as the buyer was considering shifting it to India, where tariffs are lower.

"Multinational clothing brands are also negotiating prices for goods meant for other markets like India and Japan, even though Bangladesh enjoys duty-free access there," Islam said.

"They think production in India is more cost-effective than in Bangladesh because of the lower tariff imposed on India by the Trump administration," he added. "I am deeply disappointed with the lack of progress demonstrated by the Bangladesh government."

"As a stakeholder and one of the largest exporters to the US market, I feel utterly helpless and frustrated," Islam commented.

Fazlee Shamim Ehsan, executive president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said the commerce ministry had not yet communicated with them about including private sector representatives in the talks.

"Maybe the ministry will contact us later," he told The Daily Star yesterday.​

 

[Saif]

Millions of jobs may face wipeout

Bangladesh's export-led economy faces a potential employment crisis as the US prepares to impose a 35-percent countervailing tariff on imports from the country on August 1. Industry leaders warn that the impact will be widespread - threatening not just the readymade garment (RMG) sector but also

thefinancialexpress.com.bd

IMPENDING US TARIFF SHOCK TO BANGLADESH ECONOMY
Millions of jobs may face wipeout

Jasim Uddin
Published :
Jul 18, 2025 00:29
Updated :
Jul 18, 2025 00:29

Bangladesh's export-led economy faces a potential employment crisis as the US prepares to impose a 35-percent countervailing tariff on imports from the country on August 1.

Industry leaders warn that the impact will be widespread - threatening not just the readymade garment (RMG) sector but also related industries, such as leather, plastic, agriculture, logistics, and financial services.

As the countdown to August 1 begins, stakeholders fear that failing rapid and coordinated government action, Bangladesh could lose its competitive edge on the US market - a loss that could take years to recoup and cost millions of jobs.

"This is not just a trade issue, it's a national emergency," says Shovon Islam, managing director of Sparrow Group.

"If we think only our US-bound RMG exports will suffer, we are gravely mistaken. Buyers source from one country for multiple markets. The consequences will cascade."

Speaking on condition of anonymity, the country manager of a European apparel brand said, "If the tariff issue is not resolved in Bangladesh's favour, it could reduce our business opportunities here."

He also said, "Although the US market accounts for less than 10 per cent of our total sales, it would no longer be a viable business case for us to produce goods for them from Bangladesh. We may have to consider alternative sourcing options."

The RMG and textile sectors alone directly employ nearly 4.0 million workers, with another million jobs supported indirectly in the backward-linkage industries and support services.

If the tariff hike comes into effect and order volumes fall, industry insiders say, a million jobs could be lost within two months.

Sparrow Group, which employs 18,000 workers and pays over Tk 400 million in monthly wages, exports products worth around $300 million annually, and half of that are destined for the US.

"If this market collapses, we will not last more than two months," Islam forewarns.

Similarly, Asian Group, a leading Chattogram-based apparel exporter with nearly $340 million annual exports - 93 per cent of which go to the US - has expressed serious concern.

"If the government fails to secure a favourable arrangement, we may not survive," says its Executive Director Khondaker Belayet Hossain.

"We pay Tk 600 million in monthly wages, while the overall operating cost stands at Tk 700 million."

He also says he is worried about how he would manage in the coming days if the tariff issue does not end in Bangladesh's favour.

"One of our major buyers - US retail giant Walmart - has continued current orders but is uncertain about the next season. They are already evaluating the situation," Hossain notes.

He further says the entire industry is vulnerable and about 95 per cent of RMG-factory owners would not be able to pay workers beyond a month if the situation does not improve.

"We have failed to convey to the nation the true nature of RMG profitability. When we acquire new factories, it is not for immediate profit but to consolidate operations and reduce overheads," Hossain explains.

Major buyers like Walmart, Gap, Levi's, American Eagle, and C&A, whose combined annual sourcing from Bangladesh exceeds $5 billion, are already reconsidering future orders.

Several buying houses have asked factories to delay production and shipments until further notice.

Ha-Meem Group, Bangladesh's top RMG exporter, pays Tk 900 million in monthly wages to its employees.

Industry sources say up to 70,000 jobs at Ha-Meem alone could be at risk if exports slow down.

Data from the National Board of Revenue (NBR) show 2,377 Bangladeshi firms exported to the US in FY25.

Among them, 801 depend on the US for more than 50 per cent of their total exports, making them particularly vulnerable.

Collectively, these companies exported $6.62 billion worth of goods globally in FY25, with $5.05 billion - 58 per cent of Bangladesh's total exports - to the US.

Bangladesh exports nearly $10 billion worth of goods to the US annually, including leather, plastic, and agro items.

"If order volumes decline, the spill-over effect will ripple across spinning mills, dyeing units, accessory makers, transport operators, banks, and insurers," says Fazlee Shamim Ehsan, a member of the Bangladesh Employers' Federation executive committee.

Backward-linkage industries - such as spinning, dyeing, accessories, and chemicals - are heavily dependent on export volumes.

A reduction in the US-bound shipments would inevitably hurt their operations, leading to layoffs and financial strains, experts say.

Similarly, thousands of jobs in the domestic logistics and transport businesses - freight forwarding, clearing and forwarding (C&F) agents, and warehouse operators - are tied to the export- supply chain.

These businesses fear revenue losses if US buyers scale back orders or shift sourcing to alternative countries.

Financial services, such as export financing, trade insurance, and customs brokerage, too, are expected to come under pressure.

"Any disruption to trade volume affects our loan performance. Many exporters rely on back-to-back letters of credit (LCs) and factoring support, which will get strained if US orders shrink," says a senior official at a leading commercial bank.

Insurers are also bracing for a possible drop in marine and export-credit insurance premiums, with fewer goods being shipped abroad.

Meanwhile, local small and medium enterprises (SMEs) that supply to export factories fear they could be the first to face closures.

Despite being one of the largest sources of imports for the US, Bangladesh currently lacks preferential-market access.

In contrast, countries like Vietnam, India, and Sri Lanka have pursued strategic trade diplomacy by offering the US imports, such as liquefied natural gas (LNG) or cotton, in exchange for tariff relief.

"India, Vietnam, Indonesia, and others have negotiated effectively. We failed to present reciprocal offers," Sparrow Group's Islam observes.

"We have seen how Chinese exports to the US dropped by over $100 billion under the Trump-era tariffs. Bangladesh could face the same fate," he adds.

He has called for urgent high-level diplomatic interventions, suggesting economists and experienced business leaders be dispatched to Washington to negotiate a settlement before the tariff becomes effective.

On Tuesday, after a meeting with business leaders, BNP standing committee member Amir Khasru Mahmud Chowdhury urged the government to strengthen its negotiations with the US by involving businesses, political parties, and industry leaders.

"If not addressed properly, the tariff issue could severely impact our economy, employment, and exports," he said.

He warned that over $8 billion in exports and 1.5 million jobs are at risk, stressing that political consensus is essential on the matters of national interest.​

 

[Saif]

Negotiations dragging on over non-trade issues

Although there is consensus on trade-related matters, negotiations between Bangladesh and the United States are currently stalled over non-trade issues, including some sensitive topics. A Bangladeshi delegation is scheduled to travel to Washington next week for a third round of negotiations...

en.prothomalo.com

Bangladesh-US tariff talks
Negotiations dragging on over non-trade issues
Staff Correspondent Dhaka
Updated: 16 Jul 2025, 13: 57

Flags of Bangladesh and the US Prothom Alo illustration

Although there is consensus on trade-related matters, negotiations between Bangladesh and the United States are currently stalled over non-trade issues, including some sensitive topics.

A Bangladeshi delegation is scheduled to travel to Washington next week for a third round of negotiations after consultations with the interim government’s chief adviser and others.

This information was gathered from conversations with several business leaders. However, due to a non-disclosure agreement with the United States, government advisers and officials are not commenting publicly on the negotiations.

On 7 July, US President Donald Trump announced new tariff rates on imports from 14 countries, including Bangladesh, South Korea, and Japan. For Bangladeshi products, an additional tariff of 35 per cent was imposed. While the tariffs were initially scheduled to take effect from 9 July, implementation has been deferred to 1 August.

If successful negotiations take place within this period, the tariff rate may be lowered; otherwise, the rate declared by Donald Trump will go into effect. Notably, three months ago, the US had already imposed a 10 per cent counter tariff on imports from all countries.

A delegation led by Commerce Adviser Sheikh Bashir Uddin returned to the country last Sunday after holding discussions in Washington from 9 to 11 July.

The US wants to deepen its geopolitical and strategic involvement with Bangladesh, primarily to ensure that Bangladesh does not tilt too far toward China. Washington wants Dhaka to avoid significantly expanding trade relations with China or encouraging Chinese investment.

At a press conference last Monday, the adviser said, “Preparations are underway for the third phase of discussions with the United States. We’ve requested a timeframe from them. We are hopeful that Bangladesh, leveraging its capabilities, will be able to continue doing business in the US market, and the US will set a reasonable tariff level on Bangladeshi goods. Last week’s discussions with the US were encouraging and quite engaging.”

A business leader, requesting anonymity, told Prothom Alo that the discussions with the United States go beyond trade. The US wants to deepen its geopolitical and strategic involvement with Bangladesh, primarily to ensure that Bangladesh does not tilt too far toward China. Washington wants Dhaka to avoid significantly expanding trade relations with China or encouraging Chinese investment.

Sources confirm that among the conditions being discussed are clauses requiring Bangladesh to comply with any sanctions imposed by the United States. This means Bangladesh will have to refrain from trade, business, or investment activities with countries sanctioned by the US. Furthermore, there is a condition that goods granted duty-free access to Bangladesh from the US should not be offered similar benefits to any other country.

Another business leader, also speaking on condition of anonymity, said that the US wants Bangladesh to import military products from the United States and, in return, reduce its military procurement from China.

Another business leader, also speaking on condition of anonymity, said that the US wants Bangladesh to import military products from the United States and, in return, reduce its military procurement from China.

The United States is the single largest export destination for Bangladesh. In the fiscal year 2024–25, Bangladesh exported goods worth USD 8.69 billion to the US, which accounts for just over 18 per cent of the country’s total export earnings. More than 85 per cent of these exports were ready-made garments. Other major exports included caps, leather shoes, home textiles, and wigs.

When contacted, Commerce Secretary Mahbubur Rahman told Prothom Alo on Tuesday, “We’ve held a meeting with business leaders and economists and gathered their opinions. Another inter-ministerial meeting will be held soon to gather further input. Altogether, we are preparing thoroughly for the third phase of negotiations in the US We are optimistic that we can achieve the best possible outcome for the country before 1 August.”

Business leaders meet with BNP official

Meanwhile, on Tuesday afternoon, BNP Standing Committee Member Amir Khasru Mahmud Chowdhury met with leaders of various business organisations at a hotel in Banani, Dhaka, to discuss the US reciprocal tariffs.

Following the meeting, Amir Khasru Mahmud Chowdhury said that to strengthen negotiations over the imposed tariffs, it is essential to move forward with unified input from all stakeholders.

He said, “Discussions regarding the US-imposed reciprocal tariffs must be reinforced. The BNP will try to initiate dialogue with the government, where we will also present the business community’s concerns so that a coordinated approach can be developed.”

Business leaders attending the meeting included ICC Bangladesh President Mahbubur Rahman; former BTMA President Tapan Chowdhury; former FBCCI President A. K. Azad; BCI President Anwar-ul Alam Chowdhury Parvez; BGMEA President Mahmud Hasan Khan; BKMEA President Mohammad Hatem; MCCI President Kamran T. Rahman and Vice President Simin Rahman; LFMEAB President Syed Nasim Manzur; and Ahsan Khan Chowdhury, Chairman of Pran-RFL Group.

After the meeting, Mohammad Hatem told reporters, “The BNP invited us to this meeting. We told them that if there is anything they can do politically, they should take those steps. Nothing should be done that harms the country. If the counter tariff stays close to the levels imposed on India and Vietnam, we can maintain our competitiveness in that market.”​