How Bangladesh finally succeeded in US tariff negotiation
Things began to turn in Bangladesh’s favour on 23 July, when it submitted a detailed position paper to the United States Trade Representative (USTR). Until then, Bangladesh had been unable to secure even a slot for the third-round talks.
Highlights
- US reduced tariffs on Bangladesh goods from 35% to 20%
- A strong position paper led to in-person negotiations
- Bangladesh pledged to buy US wheat, soybeans, cotton, and 25 Boeing planes
- Firms signed major deals, including $130M soybean imports
- Officials called the outcome competitive but hoped for deeper cuts
After months of uncertainty, Bangladesh secured a breakthrough today (1 August) as the United States cut tariffs on its imports, following stronger third-round talks where Dhaka, working with public and private stakeholders, presented a persuasive package to Washington.
Things began to turn in Bangladesh's favour on 23 July, when it submitted a detailed position paper to the United States Trade Representative (USTR). Until then, Bangladesh had been unable to secure even a slot for the third-round talks.
Following repeated requests from the commerce ministry, the US finally allotted a two-and-a-half-hour virtual slot on 29 July. But after reviewing Bangladesh's position paper, Washington's attitude changed. Instead of a single virtual session, the USTR invited the delegation for a three-day in-person meeting.
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Bangladesh became more serious after the US set its tariff at 35% in the second round, while lowering Vietnam's to 20% at nearly the same time.
As part of final preparations, the commerce ministry first sought input from business leaders and economists. It then held long meetings with ministry secretaries to prepare a list of US products Bangladesh could import.
Commerce Adviser Sk Bashir Uddin also held virtual meetings with top executives of Chevron and Excelerate Energy, as well as with the US Soybean Export Council and the American Apparel and Footwear Association, to gather recommendations.
Soon after, the food ministry signed a deal to import 700,000 tonnes of US wheat annually, while the Cabinet purchase committee approved an additional 220,000 tonnes at a slightly higher-than-market price.
Other proposals included the purchase of 25 Boeing aircraft, LNG imports from US firms on the spot market, cotton imports through government warehouses, and tariff concessions for US goods.
The commerce ministry also engaged private businesses to boost imports of US soybeans and cotton. During final talks in Washington, private importers signed contracts for large volumes of both. Bangladesh also offered to increase imports of pulses.
It is unclear whether the package proposal for the US contains additional elements.
Finance Adviser Salehuddin Ahmed told reporters, "The commerce adviser has gone to the US with a package – covering Boeing, wheat, soybeans, and other possible purchases."
When asked whether Bangladesh might also consider buying military aircraft or other items to avoid retaliatory tariffs, he replied, "There is more, but I will not say what. I will speak after the commerce adviser returns."
Before leaving for the final round, Commerce Secretary Mahbubur Rahman explained that the US was trying to shrink its $1.3 trillion trade deficit through reciprocal tariffs, while its deficit with Bangladesh is only $6 billion.
He said Bangladesh was preparing to import an additional $3 billion worth of US goods within 18 months.
Officials believe these commitments helped secure the reduction of tariffs from 35% to 20%.
Private-sector deals were also struck during the final round. Meghna Group Chairman Mostafa Kamal signed a $130 million soybean import deal, and Bangladeshi importers contracted for $30-35 million worth of US cotton.
Golam Mortoza, press minister at the Bangladesh Embassy to the US, said while Bangladesh committed to buying 25 Boeings, deliveries would be staggered over 10-15 years, meaning payments would not be made at once.
He praised the negotiation skills of Commerce Adviser Sk Bashir Uddin, National Security Adviser Khalilur Rahman, and Commerce Secretary Mahbubur Rahman, along with the effective role of the Bangladesh Embassy in Washington.
"Many countries could not even meet USTR ministers, but our commerce adviser held a 45-minute meeting. Very few countries could negotiate the way Bangladesh did," he said.
The delegation had, however, hoped for a deeper cut. Since tariffs were only reduced to 20%, advisers did not appear overly jubilant, he said.
Mortoza said Bangladesh, like many countries, was anxious, but the outcome was "manageable and competitive" compared with rivals Vietnam and India. Expectations were for a lower rate, but since that did not happen, there was little celebration within the team.
