Bangladesh fears loss from US tariffs

If a 35 percent tariff is imposed on Bangladeshi products in the US market, efforts to diversify the export sector will face losses. Such is the fear of exporters. However, they advise the government to take a thoughtful decision before accepting the US conditions to reduce the tariff burden. And economists say that the negotiations must be carried out keeping in mind that it will not fall under the pressure of the World Trade Organization’s laws. As a single country, the US is Bangladesh’s second top export destination. According to data from the US Trade Representative’s Office (USTR), in 2024, Bangladesh imported goods and services worth $2.2 billion against exports of $8.4 billion to the country. While the US trade deficit with Bangladesh is $6.2 billion, it is $45.7 billion with India and $123.5 billion with Vietnam. The Trump administration is going to impose a 35 percent tariff from August 1 to reduce the trade deficit of more than $6 billion on Bangladesh. However, despite a deficit of $123.5 billion with Vietnam, only 20 percent is being imposed. On the other hand, discussions are ongoing with India despite a deficit of $45.7 billion. Questioning whether Bangladesh is being discriminated against in this case, entrepreneurs say that emerging export sectors including plastics, leather, and electronics will suffer the most from the new decision of the US administration. Fazle Shamim Ehsan, executive president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said that if there is a 20 percent tariff on Vietnamese products, then the country’s new industries or value-added industries will face a challenge. Because such industries will develop more in countries that have received more tax benefits. Sources say that in the proposed reciprocal tariff agreement, if the US imposes additional tariffs on any country, Bangladesh will have to do the same. Even if a trade ban is imposed on any country, Bangladesh will have to pay. In this situation, exporters have advised to proceed with discussions on reducing tariffs with caution. Fazle Shamim Ehsan said that nothing can be done that will harm national interests. First the country, then everything else. At this moment, there is no room to think about anything other than the European Union. Meanwhile, economists are also advising that the government should pay special attention to not breaking the WTO rules and putting itself under additional pressure while accepting the US conditions. Professor Dr. Mostafizur Rahman, a fellow at the Center for Policy Dialogue (CPD), a research institute, said that there have been many discussions. However, if America exerts pressure to give something bilaterally, going beyond the WTO’s policies, and if we accept it, then perhaps the tariffs can be reduced. But in this case, Bangladesh will also have to take other problems into account. Earlier, a week after imposing a 37 percent tariff on April 2, the Trump administration set a three-month deadline for the realization of bilateral trade benefits. And on Monday (July 7), US President Donald Trump imposed a 35 percent tariff on goods imported from Bangladesh. The tariff will be effective from August 1.