How triple blow of US tariff, port, and ICD charges threatens foreign trade

Highlights:

• US imposes 35% tariff on Bangladeshi exports
• RMG sector fears major order losses in US market
• Ctg port hikes charges by average 40%
• Some port service fees surge up to 440%
• ICDs to raise charges by up to 44%
• New ICD rates effective from 1 September
• Calls grow for urgent govt intervention and talks

Adding to the strain on an economy already reeling from high inflation and a prolonged dollar crisis, Bangladesh's foreign trade is now facing a fresh triple blow – a 35% US tariff on Bangladeshi exports, sharp hikes in cargo and vessel handling charges at Chattogram Port, and a significant increase in service fees at Inland Container Depots (ICDs).

Stakeholders warn that without timely interventions, the combined effects could erode Bangladesh's export competitiveness, cause job losses, and drive inflation.

According to industry insiders, the increased tariffs – averaging 40% at the port and up to 44% at private ICDs – could boost the combined annual revenue of the Chattogram Port Authority (CPA) and ICD operators by as much as Tk1,800 crore.

However, traders warn that this windfall for the service providers will significantly raise the cost of doing business, especially at a time when global geopolitical tensions are already disrupting supply chains and market stability.

Describing the situation as alarming, business leaders say ultimately, this will trickle down to consumers through higher prices and ultimately hurt the economy.

The newly enforced US tariff hike adds another layer of difficulty. The 35% duty on Bangladeshi exports to the US – one of the country's major export destinations – could severely undermine competitiveness, particularly in key sectors like garments.

Stakeholders are calling on the government to negotiate with the United States, reassess the scale of recent tariff hikes at the port and ICDs.

Dr Mainul Islam, former president of the Bangladesh Economic Association, acknowledged that revising port tariffs is not entirely unjustified, given the long gap since the last adjustment.

However, he cautioned, "A 40% hike at once could destabilise trade, especially when combined with US duties and higher ICD charges."

"The full economic impact may emerge over the next three to six months — or even over four to five years in the case of US policy effects," he added.

US tariff sparks fears of order losses

The 35% reciprocal tariff imposed by the Trump administration on Bangladeshi products is set to take effect on 1 August, triggering deep concern among exporters – particularly in the ready-made garment (RMG) sector, the country's largest export earner.

Garment exporters say they are already witnessing a decline in orders from US buyers, who are uncertain about future costs. The development puts the $10 billion bilateral trade relationship between Bangladesh and the United States at significant risk.

"The imposition of the 35% reciprocal tariff has triggered unprecedented uncertainty in our RMG sector," said Rakibul Alam Chowdhury, former vice president and current director of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

"We exported $7.4 billion worth of garments to the US in 2024, and already some buyers are pulling back."

He warned that Bangladesh could lose up to 25% of its export orders for the upcoming summer and autumn-winter seasons of 2026-27 – a blow that would affect not only export earnings but also factory operations and employment across the industry.

40% average charges hike at Ctg port

Adding to the growing cost burden on foreign trade, the Chattogram Port Authority (CPA) is set to implement an average 40% hike in tariffs across 56 service categories – with some charges soaring as high as 440%.

The Ministry of Finance issued a no-objection certificate (NOC) for the tariff revision on 24 July. A formal gazette notification by the CPA is expected soon.

According to CPA data, the port collected Tk3,912 crore from shipping and cargo services in FY24. With the revised rates, revenue is projected to increase by about Tk1,500 crore annually.

"Businesses had proposed a modest 10%-20% increase, given the current economic challenges," said Mahfzul Haque Shah, former director of the Chattogram Chamber of Commerce and Industry. "Instead, the hike is much steeper and burdensome."

He also highlighted the persistent issue of unofficial costs at the port, saying, "These unseen charges, often in the form of bribes, frequently exceed the official tariffs."

Shipping Adviser Brigadier General (Retd) M Shakhawat Hossain, during a visit to Chattogram Port on 25 July, said, "Port tariffs haven't been revised since 1986. Compared to international ports, Chattogram's charges are still relatively low."

ICD charges to rise by up to 44%

As port tariffs climb, private ICDs – which handle the bulk of Bangladesh's export cargo – are also set to raise their service charges significantly from 1 September. The Bangladesh Inland Container Depot Association (BICDA) formally announced the hike through a notification issued on 15 July.

The new rate structure includes a 36%-44% increase in export container handling charges and up to a 31.8% rise for handling empty containers. However, import container handling charges will remain unchanged.

Industry estimates suggest the revised charges could add around Tk300 crore annually to export and logistics costs – further escalating the cost of doing business amid an already challenging trade environment.

Ruhul Amin Sikder, secretary general of BICDA, said, "We held off on tariff hikes for the past three years despite rising operational costs and currency depreciation. While payments at ICDs are made in taka, we have to settle dues with foreign agents in dollars. The new rates reflect the growing financial pressure we're facing."

Meanwhile, SM Saiful Alam, president of the Chittagong C&F Agents Association, criticised the move, saying, "When export volumes rise, hundreds of trucks are stuck on the roads due to ICD bottlenecks. Yet, charges are being increased without any improvement in service quality."