Tariff war ceasefire: Bangladesh must rethink its trade strategy
For a brief moment, the US-China trade war appeared to offer Bangladesh a rare and powerful opportunity as tariffs between the world’s two largest economies skyrocketed, peaking at a staggering 145% on Chinese goods entering the US. Bangladesh, with its robust RMG sector and established export infrastructure, was poised to benefit from China’s diminished competitiveness in the US market. But that window has closed — the US has slashed its tariff on Chinese goods to just 30%, while China has reciprocated by reducing tariffs on American products to 10%. So what must Bangladesh do next? Business leaders and economists weigh in
Cannot seize opportunities without strong logistics, planning
Abul Kashem Khan
Chairman, Business Initiative Leading Development (BUILD)
It was initially assumed that countries facing higher tariffs would be at a disadvantage, while those with lower tariffs might enjoy certain benefits. However, the issue lies in the nature of the products China manufactures — we do not directly compete in those sectors.
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So, can we really capitalise on that opportunity at all? To reap any benefit, a country must first enter those specific product lines. The timeframe required to do so would not be in our favour. We were unlikely to gain from this in the short term; any potential advantage might only materialise in the medium to long term.
On the other hand, how long could the US realistically maintain these tariffs on China? The measures had already impacted their stock market, as well as major suppliers and retailers like Walmart — many warned it would result in empty shelves and disrupted supply chains. It was not a sustainable or realistic approach. Rather, it seemed more like a strategic game for the US: how much leverage they could extract from China. So even if the tariffs had remained in place, we might only have seen some long-term advantages.
At the same time, we face our own challenges in terms of policy and strategy — we lack a clear and effective roadmap. If we had the right logistics, strategic planning, and supply chain systems in place, we could have seized the opportunity almost overnight. But by the time we would have managed to build these foundations, other competing countries such as Vietnam, Cambodia, and Indonesia would not have remained idle. Much would therefore depend on a range of factors. Moreover, our reform processes, particularly in areas like policy and taxation, tend to be painfully slow. What should take seven days often takes us two years.
The new reality is that the US and China have reached a deal and pledged to reduce reciprocal tariffs. In light of this, we too should formulate our own strategy — exploring how we might derive benefits, using China as a reference point, while acknowledging that we have not yet reached that level of development. As an emerging economy, we are still far behind. It would be unrealistic to compare our economic standing or prosperity with that of China.
We need to engage in negotiations with the US, making it clear that, as an LDC, Bangladesh relies heavily on access to the American market. At the same time, American products are certainly welcome here — provided the pricing is competitive. However, the reality is that many of the goods the US exports are not in high demand in Bangladesh. A large volume of imports from the US is therefore unlikely to materialise overnight; it may only increase gradually over time. For instance, American cars might gain a foothold here if we can develop a suitable tariff structure and ensure the availability of spare parts. There are, in fact, many such opportunities we could explore.
Abul Kashem Khan spoke to TBS' Masum Billah over the phone.
Need to build resilience at home, not rely on other countries' trade wars
MA Razzaque
Chairman, Research and Policy Integration for Development (RAPID)
With the US now easing tariffs on China, Bangladesh's unexpected trade advantage is fading fast. While the tariffs were high, many global buyers looked to shift orders away from China, and Bangladesh benefited. But as those tariffs roll back, that window of opportunity is closing.
China has lowered some duties, but there's no clarity on what happens next. Nothing about this geopolitical tug-of-war is predictable. And Trump? Even less so.
The bigger issue is that this trade edge may not return. Other countries like India and Vietnam are aggressively courting buyers, offering incentives that Bangladesh currently can't match. And while we are heavily reliant on exports, our position in these negotiations is weak. We're not in the room — we are reacting from the outside.
This moment demands realism. We do not know how the US–China relationship will evolve. We do not know which deals will stick or who will benefit next. What we do know is that the power lies with the major economies — and right now, Bangladesh is not holding many cards.
Even with our best offers, we may still come off as less attractive. It is a hard position to be in. But it is the one we are in.
We need a new strategy — one that does not rely on other countries' trade wars to give us an edge, but builds resilience at home, diversifies our markets, and makes Bangladesh competitive on its own terms.
MA Razzaque spoke to TBS' Nasif Tanjim over the phone.
High interest rates, energy costs deter necessary investments
Shams Mahmud
Managing Director, Shasha Denims and Former President, DCCI
Bangladesh stands to lose significant trade advantages as the US-China trade war de-escalates. While the 10% tariff on our products remains unchanged, reduced tariffs on Chinese goods will erode our competitive edge in the US market.
Recent reports show Indonesia, Cambodia, and Vietnam actively negotiating with the US Department of Commerce. Yet Bangladesh appears to be falling behind – we've seen no substantive discussions since the initial correspondence. News has emerged that the US has requested a proposal from us, confirming we have not even begun proper negotiations. This delay is particularly concerning given that even India has reached an agreement, leaving Bangladesh isolated in this critical trade realignment.
The implications are severe for our RMG-dependent economy. The 10% tariff will hit hardest in segments where we lack competitive advantages. While we have traditionally competed on low wages, we are ill-equipped to match other countries in value-added categories like outerwear jackets and sweaters that require greater investment and skilled labour.
Several structural challenges compound this problem. We lack China's manufacturing capabilities for many product categories. High interest rates and energy costs (gas/electricity) deter necessary investments, and persistent law and order instability creates additional business risks
Most troubling is the lack of transparency. The business community remains in the dark about negotiations with US authorities, despite being key stakeholders who should provide input. We've repeatedly raised concerns about energy security and LDC graduation preparedness, yet see little coordinated action to address these fundamental competitiveness issues.
Shams Mahmud spoke to TBS' Shadique Mahbub Islam over the phone.
