Bangladesh’s inability to mount an effective trade negotiation strategy has left exporters vulnerable to a steep 35% reciprocal US tariff — one of the highest among 14 countries targeted by Trump’s revived protectionist push, said experts.
While the tariff was initially set to take effect on July 1, the US president has extended the deadline to August 1, after most affected countries scrambled to renegotiate.
Economists and business leaders say that despite having a three-month window from April to July, Bangladesh managed to cut its own tariffs by only 2% — a token move compared to competitors like Vietnam, and ahead of only four of the 14 countries that received Trump’s tariff threat.
Zahid Hussain, former lead economist at the World Bank's Dhaka Office, told Dhaka Tribune: “I spoke to various levels of the government yesterday, and I learned that a flat 20% tariff has been agreed upon for Vietnam by the US. In Bangladesh's case, the new tariff will be added to the previous tariff. If this 35% is added to the existing 15%-16%, the average tariff on imports from our country to America will be over 50%.”
The government’s financial adviser and interim officials maintain optimism ahead of a critical July 9 meeting, but business leaders and trade analysts remain skeptical.
According to the letter posted by Trump, only Laos (40%), Myanmar (40%), Thailand (36%), and Cambodia (36%) received higher tariff rates than Bangladesh.
The remaining countries facing hikes include Serbia (35%), Indonesia (32%), South Africa (30%), Bosnia and Herzegovina (30%), Malaysia (25%), Tunisia (25%), Japan (25%), South Korea (25%), and Kazakhstan (25%).
Zahid Hussain further said: “Also, if you notice that countries like BRICS, Indonesia, and South Africa have also negotiated better than us, which Trump does not like, it seems. Out of the 14 countries who got Trump's letter, only 4 countries are behind us in negotiations; the rest have got equal or better deals than us.”
“India is another competitor for our RMG sector, apart from Vietnam, and I am waiting to see how different theirs will be from ours.”
By highlighting Bangladesh’s poor negotiation skills, the former lead economist at the World Bank stated that he could no longer be optimistic about the negotiations that have been going on since April.
“Actually, we (Bangladesh) were not able to crack any deal, we could not come to any agreement; that is why we received this letter. If you look closely, you will see that our delegation has been in America for the past few weeks, but it seems they have achieved no success. It is clear.”
The government is also optimistic about the upcoming meeting on July 9. Asked about this, he said: “I don't think there will be any major changes in the space of two days. If that were the case, the letter would not have been issued. Yes, Trump said there is time. If the government can do what they couldn't do in the next meeting, that will be good for the country. But I don't hope things can be turned around so quickly.”
Tariff response
Following Trump's announcement of reciprocal tariffs in April, Bangladesh swiftly responded by sending a formal request to Washington, seeking a three-month delay in implementation. Meanwhile, Vietnam proactively secured tariff-free access for its exports and initiated negotiations.
Earlier, Dhaka proposed to buy Boeing planes and increase imports of US wheat, cotton, and oil in a bid to reduce the trade deficit, which Trump has used as justification for imposing painful levies.
It must be noted that Boeing has been suffering from a decline in sales since a series of crashes have exposed the company's lack of safety and adherence to rules and regulations.
Professor Mustafizur Rahman, distinguished fellow of the Centre for Policy Dialog (CPD), told Dhaka Tribune: “We were told that Bangladesh is the first country to start negotiations with the US Trade Representative (USTR). Even after three months of negotiations, such a result is disappointing. Because the additional 37% tariff that was imposed in April and August is being reduced by only 2%.”
“This will be a big disaster for exports, because it will create a big difference with our competitors,” he added.
Inamul Haq Khan Bablu, senior vice-president of the Bangladesh Garment Manufacturers and Exporters Association, said: “The businesses are still in the dark about how the government is conducting negotiations. Maybe the government was late in starting serious negotiations. The government had three months to negotiate with the US, and they could have sealed a great deal within that time frame.”
“However, as there are about 20 days to discuss, we hope that the rate will be lowered,” he added.
He further explained that if the tariff on India and Pakistan were to be lower than Bangladesh, it would be disastrous for the country’s exporters.
Mohiuddin Rubel, managing director of Bangladesh Apparel Exchange and former director of the BGMEA, said that Bangladesh must take immediate action, including advocating for changes in tariff policies.”
“With the US being Bangladesh's top export destination, the impact of this tariff is anticipated to be significant. Apart from the immediate threat of reduced export orders, the implications extend to job losses and economic instability within the country,” he added.
Fazlee Shamim Ehsan, executive president of the Bangladesh Knitwear Manufacturers and Exporters Association, said: “We have also come to know that there was a mirroring clause, meaning US sanctions imposed on China could automatically influence Bangladeshi exports if the products were manufactured with Chinese raw materials.”
“As the negotiations are still ongoing, we are hopeful something positive will come,” he added.
All eyes on July 9 meeting
Finance Adviser Salehuddin Ahmed said the imposition of a 35% supplementary tariff on Bangladeshi products by the US is not justified, especially when the trade deficit between the countries is comparatively low.
“It is true that our trade deficit with the US is only about $5 billion, while Vietnam’s is $125 billion. Even so, the US has agreed to offer Vietnam some concessions. In that case, given our much smaller deficit, there is no justification for imposing such a high tariff on us. We will continue to negotiate.”
The adviser said that trade talks are ongoing between the two countries.
“Our trade advisor is currently in the US. There will be another meeting with them. Once a formal discussion is held with the USTR (United States Trade Representative), we’ll have a better understanding of the situation. Whatever the outcome of that meeting, we’ll take appropriate steps based on it.”
“The meeting looks likely to be somewhat positive. The [US] president has already sent a letter. Now one-to-one negotiations will follow.”
Meanwhile, Golam Mortoza, press minister at the Bangladesh Embassy in Washington, DC, said the 35% tariff imposed on Bangladesh by the US is not a final decision, as the discussions are still ongoing.
“Bangladesh is putting the utmost effort for a positive outcome, and that possibility is not over yet,” Mortoza wrote in a post on Facebook today (8 July).
He said the next round of talks is scheduled for July 9, and Commerce Adviser Sheikh Bashir Uddin will join the meeting physically in the US, while the trade secretary will join virtually.
In another Facebook post on Monday, Press Secretary to the Chief Adviser Shafiqul Alam wrote: “The Bangladesh team has held several rounds of discussion with their American counterparts. Another round of talks is scheduled for July 9. SK Bashir Uddin will lead the Bangladesh side during the discussion. Dhaka is looking forward to a tariff deal with Washington, DC, which, we hope, will be win-win for both countries.”
He (Bashir Uddin) is in Washington, DC, leading the country's trade talks with the United States. National Security Adviser Dr Khalilur Rahman is also part of the team, Alam added.
