Can Bangladesh increase imports from the US fast?

With the US gearing up to impose steep reciprocal tariffs on Bangladeshi exports, Dhaka is now taking steps to rebalance the trade relationship by increasing imports from the US. The government is actively seeking ways to reduce tariffs on American products to ensure the reciprocal tariff gets lowered. 
While this approach could help create a more balanced trade dynamic and improve diplomatic ties, it also comes with economic risks and logistical hurdles. Increasing imports from the US in short-term may come with some complications of its own, including higher production cost and logistical issues. Most importantly, the biggest challenge is the sheer uncertainty of the tariffs. 
Trump's tariffs are creating widespread challenges, affecting not only Bangladesh but also our competitors. Until the final structure of these tariffs becomes clear, it is difficult to make informed decisions. Additionally, the EU and China have begun imposing retaliatory tariffs. Hence, the investors and manufacturers would be less likely to invest the extra money to react to an uncertain tariff regime. 
"Importing from the US means we will not import the same products from other countries, from where those were cheaper and easier to source," said Jyoti Rahman, the director of International Affairs at the Sydney Policy Analysis Centre, "It will increase the cost of production for our manufacturers and would require significant short-term investments." 
From a macroeconomic perspective, the feasibility of increasing imports from the US also hinges on the strength of the taka and the state of foreign exchange reserves. As of early 2025, the taka remains under pressure, trading around 115 to the dollar. 
While reserves have stabilised at $23 billion, the central bank remains cautious about large-scale dollar outflows. This presents a dilemma. 
On one hand, import diversification is vital for trade diplomacy; on the other, the current account deficit limits the state's room for manoeuvre. One solution floated by policymakers is to pair high-value US imports with concessional financing or foreign direct investment (FDI) commitments from American companies so that the trade does not worsen fiscal stress.
Jyoti Rahman further pointed out, "Even if private importers are encouraged to buy from the US, they could end up incurring financial losses—and it's unlikely the government will step in to cover those. On top of that, bringing in higher-cost goods from the US could put additional pressure on public finances. The big question is, does our government have the fiscal space to take on that burden?"
Even as Bangladesh seeks to increase imports from the US, it must simultaneously reform its domestic trade facilitation ecosystem to enable smoother inflows and build confidence among American firms.
Rubaiyath Sarwar, economist and managing director of Innovision Consulting, said, "Bangladesh should not rapidly jump in to make wholesale reductions in tariffs. We also need to keep in mind that for each commodity, there is competition and the tariff imposed by the competing country will affect the tariff that we can apply." 
"I will suggest that we have to carefully pick commodities and measure how countries that we are competing against for the US export market are trying to use their imports from the US to gain in exports. We can introduce different rates of tariff on commodities from the US  to understand how reducing the tariff rate on those commodities can influence our trade surplus with the US by means of increasing import while other determinants are controlled," he added. 
One of the sectors where Bangladesh is increasing US imports is cotton. The US is one of the largest exporters of high-quality cotton, and Bangladesh is the second-largest apparel exporter globally. 
Currently, Bangladesh sources most of its cotton from India, Brazil, and some African countries. The Ministry of Commerce has decided to swiftly establish a warehouse to facilitate increased cotton imports from the US on 6 April. 
"The United States has confirmed that ready-made garments (RMG) manufactured from US cotton—which Bangladesh imports duty-free—will face only a 20% tariff when exported to the US. By shifting to American cotton, Bangladeshi exporters could reduce their applicable tariff from 37% to 20%, significantly enhancing competitiveness in the US market.," said Mohammed Mia, a founding board director of the US Bangladesh Unity Initiative and an investment executive.
In FY22, Bangladesh imported $398 million worth of cotton from the US, but there is room for significant expansion. However, switching suppliers comes with risks: US cotton is more expensive than that of regional players, and the logistics are more complex. 
Mills in Bangladesh are price-sensitive, and unless the government subsidises or incentivises the switch, the industry may resist.
This has been pointed out by Jyoti Rahman: "Our cotton mostly comes from India, Brazil or Benin. The reason is that it is cheaper and easy. It's our comparative advantage. Importing costlier cotton from the US may drive the production cost of RMG up. Let's not forget that the main consumers of our RMG in the US are the low-income and lower-middle-income groups, who will also be hit hard by the tariff." 
In energy, Bangladesh has shown increasing interest in US-supplied liquefied natural gas (LNG) as part of its broader energy diversification strategy. On 25 January, the government signed a transformative Heads of Agreement (HOA) with Louisiana-based Argent LLC for the purchase of up to five million metric tons of liquefied natural gas (LNG) annually. 
But it also comes with volatility. 
In early 2022, US LNG prices soared after Russia invaded Ukraine, forcing Bangladesh to cut back on its purchases due to fiscal pressures. For American LNG to become a viable long-term solution, Bangladesh will need to invest heavily in infrastructure—particularly in storage, regasification facilities, and port development. 
Mohammed Mia said, "If we want true energy security, we have to diversify our sources instead of depending on a single supplier. Right now, Bangladesh has long-term LNG deals with Qatar, while our spot market purchases come from traders like Vitol and Gunvor." 
The National Bureau of Revenue officials are preparing a list of products currently imported from the US that could qualify for tariff reductions — particularly items where duty cuts would encourage higher imports without significantly harming Bangladesh's revenue. 
In response to NBR's proposals, economist M Masrur Reaz, chairman of Policy Exchange Bangladesh, said it is necessary to understand what the US expects from Bangladesh and which products they are requesting duty reductions from instead of reducing duties arbitrarily.
"Otherwise, reducing duties according to our own wishes will not be enough to satisfy the US," he said, "We suggest the government promptly connect with the US side. The government may send a letter to the US within two days," he told The Business Standard after the meeting. 
Bangladesh's effort to narrow its trade gap with the US by boosting targeted imports is both timely and necessary. But for it to work, it must be backed by institutional reforms, careful financial management, and a realistic cost-benefit approach. The strategy is underway—but its success will depend on how effectively it's executed amid global uncertainties and challenges at home.