Task force needed to negotiate trade terms with US: ICCB

A task force under the commerce ministry should be formed to negotiate favourable trade terms with the United States, as a 35% "reciprocal tariff" announced by President Donald Trump is scheduled to take effect from 1 August, the International Chamber of Commerce, Bangladesh (ICCB) has said.

If the new tariffs are imposed on Bangladeshi goods, job creation will be seriously hampered, ICCB President Mahbubur Rahman said at the 30th annual council of the trade body held in Dhaka yesterday.

The council stressed the urgency for strategic adaptation as Bangladesh faces an unstable global climate marked by geopolitical tensions, the Red Sea crisis, wars in Ukraine and the Middle East, and rising protectionism, especially following Donald Trump's return to the US presidency.

It also highlighted that the persistently low tax-to-GDP ratio, hovering below 10%, is a major constraint on fiscal health. 

The restructuring of the National Board of Revenue is expected to improve efficiency and fiscal space, said the ICCB.

LDC graduation could hurt trade competitiveness

The council warned that Bangladesh's upcoming graduation from LDC status in 2026 could threaten trade competitiveness, particularly in RMG exports, which may face up to 11.5% tariffs in major markets like the EU and UK.

It also noted that export diversification and FDI remain weak. Bangladesh attracted only $3 billion in FDI in 2023, staying far below its competitors, such as Vietnam, which attracted $39 billion.

To mitigate this, the ICCB urged the government to formulate a transition strategy to maintain export momentum and retain foreign investment post-LDC graduation. The ICCB recommended prioritising pharmaceuticals, agro-processing, and ICT to reduce overreliance on garments.

External pressures slow economic growth

The ICCB said Global economic growth is projected at only 2.8% in 2025. The US–China trade war, inflation, and fragmented supply chains further compound risks for export-driven economies like Bangladesh.

The council noted that the World Bank forecasts a 3.3% economic growth for Bangladesh in 2024–25 fiscal year, while the IMF and ADB predict 3.8% and 3.9%, respectively. High inflation that is exceeding 10% overall and 14% for food has been marked as responsible for worsening the slowdown, it said.

There are concerns over the fragility of the financial sector, as non-performing loans hit Tk3.45 trillion by end-2024, said the ICCB. With nineteen banks facing capital shortfalls, calls for reforms such as board dissolutions, mergers, and stricter oversight grew stronger at the Council, it said. 

Discussions pointed to Bangladesh's growing vulnerability in energy security. Reliance on costly fuel imports and currency pressures prompted renewed emphasis on domestic exploration and ramped-up investment in renewable sources to ease long-term risks, said the ICCB.

Speakers also underscored the climate crisis. With floods, droughts, and salinity threatening food systems and rural livelihoods, it was warned that inaction could shrink GDP by up to 2% annually, which would pose long-term threats to economic resilience.

The council approved the 2024 audit report and appointed the auditor for 2025. 

Diplomats from Brunei, Myanmar, Argentina, and officials from the Asian Development Bank attended the event as special guests.