Commerce ministry engages economists, US, local firms before 3rd round of tariff talks

Highlights

• Third round of US tariff talks preparation underway
• Commerce ministry seeks input from US and local businesses
• Adviser Bashir holds meetings with Chevron, Excelerate Energy
• Inter-ministerial meeting discusses Bangladesh's negotiation position
• More meetings set with USSEC and AAFA
• No date yet for third round of negotiations

The Ministry of Commerce is actively engaging with American businesses operating in the country, in addition to Bangladeshi businesses, economists, and relevant ministries, for feedback ahead of the third round of negotiations with the United States Trade Representative (USTR) on a potential trade agreement concerning the reciprocal tariff imposed by the US.

As part of this effort, Commerce Adviser Sheikh Bashir Uddin held virtual meetings yesterday afternoon (16 July) with top executives from the US-based energy companies Chevron and Excelerate Energy.

On the same day, his ministry also convened an inter-ministerial meeting to finalise Bangladesh's negotiating position for the upcoming talks. Representatives from the ministries of foreign affairs, food, agriculture, and health participated in the discussion.

Commerce ministry officials said further consultations are scheduled, including a virtual meeting with the US Soybean Export Council (USSEC) on 18 July evening and another with the American Apparel and Footwear Association (AAFA) on 22 July.

Bangladesh is a major importer of soybeans from the US, while the AAFA represents American companies that import ready-made garments and footwear from Bangladesh.

A commerce ministry official told The Business Standard on condition of anonymity that the ministry is seeking feedback and support from American companies doing business with Bangladesh as part of its efforts to reduce the 35% reciprocal tariff imposed by the Donald Trump administration.

"The views and cooperation of US companies engaged in trade with Bangladesh are being sought to strengthen Bangladesh's position ahead of the upcoming negotiations," the official said.

Another senior official from the ministry said Bangladesh has not yet received a confirmed date for the third round of negotiations. "Once Bangladesh submits its feedback on the draft agreement provided by the US, the USTR will inform Dhaka of the negotiation schedule," the official said.

However, as part of its advance preparations, the commerce ministry has already booked air tickets for a possible US trip on 21 July, the official added.

Officials also said preparations for the third round of talks have intensified since the return of Commerce Adviser Sheikh Bashir Uddin from the second round of discussions on 13 July evening. On 14 July, the ministry consulted with local business leaders and economists to discuss Bangladesh's position on the possible US trade agreement.

What was discussed in inter-ministerial meeting

Following yesterday's inter-ministerial meeting, Commerce Secretary Mahbubur Rahman told TBS that many aspects of import and export are linked to various ministries, each governed by its own set of laws and regulations.

"On matters related to the ongoing trade agreement with the United States, the commerce ministry alone cannot make decisions," he said.

"That's why we've gathered opinions and decisions from the relevant ministries and departments. From now on, regular meetings will be held with all concerned parties on the US tariff issue."

He added, "Once we finalise Bangladesh's position, we will send a draft response to the United States. Based on that, the third round of negotiations will take place between the two countries."

When asked when Bangladesh would send its proposal, the secretary said, "We've reached out to the US side for clarification, but they haven't informed us of anything yet."

One official who attended the meeting told TBS that the commerce ministry also sought feedback from relevant ministries on whether increasing imports from the United States would raise any objections or potentially harm domestic producers in the respective sectors.

Bangladesh falls behind in US tariff negotiations

Commerce ministry officials have said Bangladesh was initially not overly concerned when the US announced reciprocal tariffs on 2 April, including a 37% duty on Bangladeshi exports. At the time, the US had imposed even higher tariffs – up to 46% – on Vietnam, Bangladesh's main competitor in the US apparel market. This created an opportunity for Bangladesh to gain a competitive edge over Vietnam.

However, in a sudden move during the final moments of the second round of negotiations, US President Donald Trump announced a reduction in the tariff on Vietnamese exports from 46% to 20%, while maintaining a 35% tariff on Bangladeshi products, to take effect from 1 August.

Indonesia, another key competitor of Bangladesh in apparel exports, initially faced a 32% duty. Trump later announced that this would be lowered to 19%. Meanwhile, India, which had been facing a 26% duty, is now expecting it to fall below 20%, according to indications received from Trump administration officials in New Delhi.

During the second round of negotiations, Bangladeshi officials believed the country was ahead of others in the tariff talks and that no nation, including Vietnam, would be able to sign a deal with the US before 9 July.

Additionally, based on a Bloomberg report, Bangladeshi policymakers assumed that the US might suspend the implementation of reciprocal tariffs for a year and that Indonesia would not enter into any negotiations with Washington regarding tariff reductions.