CA hopes tariff issue will be resolved thru talks with US as govt decides to lift non-tariff barriers

Highlights

• Govt plans to bring changes in import policy immediately
• Will negotiate with US to reduce tariff rates
• Steps to be taken to ease business operations, attract investment

In response to the US imposing a 37% tariff on Bangladeshi imports, the government plans to revise its import policy by easing non-tariff barriers to facilitate US exports, while Chief Adviser Muhammad Yunus remains hopeful of positive progress in resolving the tariff issue through talks with the US government.

Bangladesh will also take steps to simplify investment and business processes while negotiating tariff reductions through bilateral talks with the US and strengthening domestic competitiveness, according to finance and commerce ministry sources.

The finance adviser instructed his ministry's relevant departments to conduct a thorough assessment and take necessary measures. Meanwhile, the commerce advisor is scheduled to meet with the US ambassador in Dhaka on Sunday, with the commerce secretary also attending the discussion.

The decisions were taken at an urgent meeting today between Finance Adviser Saleh Uddin Ahmed and Commerce Adviser Sk Bashir Uddin following the announcement of the new US tariff policy.

Bangladesh reviewing tariffs on products imported from US: CA Press Wing

Earlier today, Trump announced that the US is imposing reciprocal tariffs to match duties put on US goods by other countries. The US president displayed a poster that listed reciprocal tariffs, including 37% on Bangladesh, a significant rise from the current 15%.

In response, Press Secretary Shafiqul Alam, quoting the chief adviser, said, "We are studying it. Since it is negotiable, we will negotiate and I am sure we can craft out the best deal."

Talking to BSS in Bangkok, Shafiqul Alam said, "The whole issue is still at the early stages of discussion. We are reviewing it and we are hopeful that the steps we are taking will help make our relations with the US stronger in the coming days." 

"We will do something that will protect the interests of both the US and Bangladesh," the press secretary said, adding that Bangladesh continues to communicate with the US to this end.

Dip in exports, possible global economic slowdown: How Bangladeshi economists view Trump's tariffs

Meanwhile, Commerce Secretary Mahbubur Rahman told The Business Standard that all relevant departments have been instructed to assess the potential impact and formulate responses.

"The government will adopt both safeguard and corrective measures. As part of corrective actions, changes to the import policy will be implemented immediately, including the removal of certain non-tariff barriers on US exports," said the secretary.  

He said Washington has taken an aggressive approach toward global trade, making diplomatic engagement essential. "There is no room for aggression from Bangladesh. The only viable solution is bilateral negotiation, and steps have already been taken in that direction."

Would earlier negotiations work

Trump's new tariff measures were anticipated long before he took office in January, and neighbouring India had been proactively negotiating with the US. India has been slapped with a 26% tariff. 

Before the Indian Prime Minister Narenrda Modi's visit to the US in February, India unveiled sweeping cuts to duties on imports from textiles to motorcycles. It followed New Delhi's pledge to accept thousands of unlawful migrants from the US and maintain the US dollar as its trading currency.

Zahid Hussain, former lead economist at World Bank's Dhaka office, explained that the new US tariff calculations focused on the trade deficit with the US and its causes, including tariffs, para-tariffs, and non-tariff barriers. 

Countries that have earlier negotiated lower tariffs on US exports or shown reduced tariffs in USTR assessments have seen lower tariffs hikes, he said. 

He noted that Bangladesh has already made significant progress, particularly in areas like intellectual property, the Digital Security Act, and patent rights. Bangladesh is also considering giving priority to US cotton imports. 

"These efforts must now be highlighted, as the Trump administration has stated that if a country lowers tariffs on US goods, the US will reciprocate by lowering tariffs on that country's exports," added the economist.

Commerce Secretary Mahbubur Rahman noted that Bangladesh consistently negotiates for zero or reduced tariffs on its products in the US market during Ticfa meetings, complying with US conditions. The last meeting was in April 2024 under the Biden administration, but the Trump administration is taking a different approach to trade policy.

Meanwhile, a commerce ministry source said Bangladesh had hoped the Trump administration would not increase tariffs, as the US already benefits from zero or reduced tariffs on services, cotton, and scrap imports, including from companies like Facebook and Google.

Bangladesh-US trade

According to the Office of the United States Trade Representative (USTR), bilateral trade between the two countries amounted to $10.6 billion in 2024. The US exported approximately $2.2 billion worth of goods to Bangladesh, while Bangladesh shipped around $8.4 billion worth of products to the US.

Data from the US Embassy in Dhaka indicates that American exports to Bangladesh primarily consist of agricultural goods, such as grains, seeds, soybeans, cotton, wheat, and corn), machinery, and iron and steel products. 

Meanwhile, Bangladesh's key exports to the US include ready-made garments, footwear, textiles, plastics, and agricultural products. India-US trade exceeded $118 billion in FY24, with India posting a surplus of $32 billion.