Tariff meeting: Bangladesh moves to import more from US, remove trade barriers
Govt eyeing renegotiations with US in one or two days
Bangladesh plans to increase imports of essential goods from the USA and reduce its trade surplus with the country to negotiate the recently announced 37% "reciprocal" tariff, set to take effect on 9 April, Commerce Adviser Sk Bashir Uddin said.
"We, especially our chief adviser, will soon contact the appropriate US authorities," he told journalists after an emergency meeting with Chief Adviser Professor Muhammad Yunus on Saturday evening.
The commerce adviser announced that Bangladesh would take steps to narrow the trade gap with the US by increasing imports and removing non-tariff barriers.
"There's no need for concern. It will take one or two more days, and we will find a solution through intense dialogue," Khalilur Rahman, chief adviser's high representative, said at the briefing.
Keep updated, follow The Business Standard's Google news channel
He noted that Bangladesh was among the first nations to unilaterally approach relevant US authorities, including the USTR, to explore ways to enhance bilateral trade.
"When I visited Washington in February, they told me, 'You're the first to approach us,'" Rahman said, highlighting the interim government's proactive engagement following the Trump administration's inauguration and its initiatives to facilitate trade with the country's single largest export market.
An inter-ministerial meeting will be held on Sunday, chaired by Finance Adviser Salehuddin Ahmed, to determine Bangladesh's course of action regarding the tariffs imposed by the Trump administration. Senior officials from the Ministry of Commerce, Ministry of Foreign Affairs, Bangladesh Bank, and the National Board of Revenue, as well as various economists and stakeholders, will be present at the meeting.
Additionally, the commerce adviser told The Business Standard that a bilateral meeting is scheduled for Monday with the US Ambassador to Bangladesh in Dhaka.
Commerce ministry officials stated that the meeting will include discussions on the additional tariffs imposed by the United States.
Lutfey Siddiqi, the chief adviser's special envoy for international affairs, said at the Saturday's briefing that a report published by the United States Trade Representative (USTR) a week ago mentioned three concerns regarding Bangladesh—customs and duties, intellectual property rights, and regulations and corruption.
"These issues also fall under the current government's reform agenda. These topics will also be brought up during the discussions on tariffs with the United States," he added.
The emergency meeting with the chief adviser at the Jamuna State Guest House was also attended by Finance Adviser Salehuddin Ahmed, Energy Adviser Fouzul Kabir Khan, Foreign Adviser Touhid Hossain, Bangladesh Bank Governor Ahsan H Mansur, National Board of Revenue Chairman Abdur Rahman Khan and economist Zaidi Sattar, among others.
Earlier, Bangladesh Investment Development Authority (Bida) Executive Chairman Chowdhury Ashik Mahmud Bin Harun held meetings with Bangladeshi business leaders throughout the day before attending the emergency meeting.
"We have two days to engage in discussions on this matter," Harun told reporters.
30 US items facing high tariff
Revenue officials estimate the weighted average tariff on US goods is less than 5% in Bangladesh.
However, an initial finding of the NBR and Bida detects thirty import items from the USA face higher duty.
The items include generation and generating set, valve, meat (beef), agro-items, some raw materials and capital machinery with duty ranging from 26.2% to 80%.
Major import items from the USA are cotton, scrap, Boeing, capital machinery are mostly exempted from payment of taxes in Bangladesh. Bangladesh imports high-end cars, occasionally, from the USA too. In the last fiscal year, five cars were imported from the USA.
A senior official of the NBR said Bangladesh, as a signatory of the World Trade Organisation (WTO), would not be able to cut taxes on any item for one country.
"If we slash taxes, we have to cut it for all countries," he added.
The NBR has found that a major point of negotiation with the USA is to cut trade imbalance by increasing imports.
Import barriers to go
The commerce adviser explained that, in line with the government's reform agenda, import barriers are being removed to boost bilateral trade between the two nations.
Since exports cannot be reduced, Bangladesh plans to increase imports from the USA to pave the way for negotiating the high tariff on its exports to the US market, Bashir Uddin added.
Under the World Trade Organisation regulations, Bangladesh cannot lower duties for a specific country. However, the government can determine its imports, including fuel, though it cannot impose preferences on the private sector.
Sk Bashir Uddin urged Bangladeshi businesses to import necessary goods from the USA, considering their export potential.
Bangladesh Bank data shows imports from the USA stood $2.53 billion in 2023-24 fiscal year, with iron and steel amounting to $601 million, fuel and oil products $595 million, cotton, oil seeds and others $361 million, nuclear reactors, boilers and machinery $341 million and parts $110 million.
The 37% tariff imposed on Bangladesh is lower than that on major Asian competitors like Vietnam and Cambodia but higher than those on India and Pakistan.
The commerce adviser expressed confidence that Bangladesh's RMG industry is robust enough to withstand such tariff barriers while competing with other Asian exporters.
He highlighted the chief adviser's high representative's proactive engagement with US authorities even before the tariffs were imposed. Moreover, anticipating such measures, Bangladeshi authorities had already taken steps to ease cotton imports from the US and amended import policies to relax fumigation requirements.
"We hope to gain a competitive edge over others in this situation," the commerce adviser added.
