Bangladesh to buy 25 Boeing aircraft as delegation heads to US today for final tariff talks

Highlights: 

• Govt defends Boeing as part of strategic move
• Meetings with USTR scheduled for 29–31 July
• Dhaka aims for lower duty than India, Vietnam
• Boeing order not yet approved by cabinet committees
• Deliveries may take years due to global demand
• Dhaka says US deals won't strain ties with China

As Bangladesh braces for the final round of negotiations with the United States over a proposed 35% reciprocal tariff on exports, the government plans to buy 25 aircraft from American aerospace giant Boeing – a move officials say is aimed at sweetening the deal ahead of the crucial talks in Washington.

The development comes as a high-level trade delegation, including Commerce Adviser Sk Bashir Uddin, National Security Adviser Khalilur Rahman, Commerce Secretary Mahbubur Rahman, and WTO Wing Director General Nazneen Kaiser Chowdhury, is set to depart this evening. 

They are scheduled to meet US Trade Representative (USTR) officials on 29 and 30 July, with a possible follow-up meeting on 31 July.

The tariff, imposed by the Trump administration, is due to come into effect on 1 August. Bangladesh hopes the aircraft order, along with other recent trade gestures, will help secure a lower tariff rate than those applied to competitors such as India and Vietnam.

Infographic: TBS

Speaking to The Business Standard yesterday, Commerce Secretary Mahbubur Rahman confirmed the order of the aircraft and said it as part of the negotiation strategy. 

"We've placed an order for 25 Boeing aircraft. Vietnam and India have done the same – each ordering 100 aircraft – as part of their ongoing tariff negotiations. Indonesia has also ordered 50."

The secretary said Bangladesh is seeking a tariff rate lower than the 26% proposed for India and the 20% finalised for Vietnam. "We do not believe the US will impose a higher duty on us compared to our competitors," he added.

'Order, not yet a purchase'

The Boeing order has yet to go through the government approval process. As per protocol, such procurements must receive clearance from the Cabinet Committee on Economic Affairs and the Cabinet Committee on Government Purchase.

"We've placed the order but haven't finalised the purchase," said Secretary Mahbubur. "We'll follow legal procedures. Boeing has been asked about delivery timelines, as demand is high globally."

"We've placed an order for 25 Boeing aircraft. Vietnam and India have done the same – each ordering 100 aircraft – as part of their ongoing tariff negotiations. Indonesia has also ordered 50."

Commerce Secretary Mahbubur Rahman

He said deliveries could take years. 

"Bangladesh urgently needs new aircraft. Some may arrive within a couple of years. Expanding Biman's fleet was always part of the plan. We've already bought 14 Boeings. This order is linked to the tariff talks."

Attempts to reach Biman MD and CEO Md Shafiqur Rahman for comment went unanswered while Spokesperson ABM Rowshan Kabir told TBS, "We are not aware about this matter."

On condition of anonymity, a senior Biman official told TBS that Biman's techno-financial committee was reviewing proposals from both Boeing and Airbus. "Suddenly, the government made this decision and Biman was informally informed about it."

Airbus still in consideration?

Biman Bangladesh Airlines currently operates 19 aircraft – 14 Boeings and five Dash 8-400s. A 10-year expansion plan approved in late 2023 aims to grow the fleet to 47 by 2034 through the addition of at least 26 new aircraft.

The same year,  the national flag carrier had decided to purchase 10 planes from Airbus, in a shift from its Boeing-dominated fleet, as the then state minister for civil aviation Mahbub Ali told the media.

"The technical committee is assessing now," Mahbub Ali said back then.

In September 2023, France thanked Bangladesh for its commitment concerning the "acquisition of 10 aircraft from Airbus".

"I thank you for your trust in the European aerospace industry. And this commitment for 10 Airbus A350 is important," French President Emmanuel Macron said in a statement to the media after a meeting with the then prime minister Sheikh Hasina, Reuters reported.

French officials said the deal for the A350 widebody airplanes, which is still being finalised, is with the national flagship carrier Biman Bangladesh Airlines Ltd.

Last month, Biman MD Shafiqur Rahman said, "Both Boeing and Airbus have submitted proposals to sell new aircraft to Biman. Our techno-financial committee is currently evaluating their offers. However, they will not be able to deliver any new aircraft before 2031."

Biman has initiated the process to lease at least two aircraft within the next few months, he said at a press conference on 26 June. 

Yesterday, the commerce secretary confirmed that while Boeing was chosen for now, "it doesn't mean we won't buy from others. This is a strategic diplomatic decision."

Critics say this is trade politics

Aviation analyst and retired Wing Commander ATM Nazrul Islam said the Boeing order appears politically motivated. 

"This is trade diplomacy to balance tariff negotiations. Fleet expansion decisions should come from Biman's technical team – not political calculations," he added.

He said Bangladesh should not fully depend on either Boeing or Airbus. "Airbus offers better fuel efficiency, while Boeing still dominates globally. But Boeing's image has suffered following multiple crashes. We must proceed cautiously."

Boeing's reputation took a hit after deadly crashes in 2018 and 2019, followed by a fatal Alaska crash in 2024 and this year's Air India Dreamliner accident. US Transportation Secretary Sean Duffy acknowledged in March that American public trust in Boeing had declined.

Nazrul said Biman needs rapid fleet expansion. "Foreign carriers dominate 75% of our international air market. That drives up ticket prices. We need 25–50 more planes within five years."

Soybean, cotton in the mix

Bangladeshi businesses are now looking to import large volumes of US soybeans, Mahbubur said. Private sector representatives will join the Washington delegation to meet US exporters.

Cotton imports from the US are also being scaled up. "Given disruptions in the Black Sea region, diversifying sources is vital. North America is a logical choice," the secretary said.

Wheat deal at higher price

Last week, the government approved the import of 2.2 lakh tonnes of US wheat at $302.75 per tonne – well above the global average of $240. On 3 July, US wheat was priced at $225 per tonne, while Russian and Ukrainian wheat was even cheaper, according to the food ministry.

The commerce secretary defended the high price, citing the need for source diversification. "We import about 9 million tonnes of wheat annually. The US buys $8.5 billion worth of Bangladeshi goods. It's fair to reciprocate."

Commerce Adviser Salehuddin Ahmed, who chairs the purchase committee, acknowledged the premium price but called it part of a broader negotiation strategy. "We're trying to strike a balance," he said.

Shift in trade strategy

The US imposed the 35% tariff as part of efforts to shrink its $1.3 trillion global trade deficit. The proposed US-Bangladesh trade pact includes investment provisions but focuses on balancing imports and exports.

"The US has been toughest on China. So we expect some of that manufacturing to move to other countries, including us," Mahbubur said. "There's opportunity here."

He dismissed concerns about alienating other trade partners. "This is a pragmatic move. Buying from the US won't harm our ties with China or others."