US tariff: Solution lies in collaboration in tech, pharma, and healthcare not buying Boeing aircrafts

In April 2025, the Trump administration introduced a major shift in trade policy by initially imposing a 37% tariff on Bangladeshi exports to the United States. This rate was later reduced to 35% and ultimately to 20%, scheduled to take effect from 1 August 2025.

The reduction from 37% to 20% is undeniably a diplomatic achievement for Bangladesh. However, unless this policy is further revised, it will still raise Bangladesh's average tariff burden from 15% to 35%, significantly challenging its competitiveness in the US market. White House defends this action, claiming Bangladesh levies an average 74% duty on American goods, encompassing tariffs, taxes, and other barriers. This policy is part of President Trump's "Liberation Day" initiative, designed to curb the US trade deficit through "reciprocal tariffs." The trade imbalance stems primarily from Bangladesh's $8.4 billion in apparel and textile exports to the US, dwarfing the US's $2.2 billion in agricultural and machinery exports to Bangladesh. This disparity has heightened tensions, prompting negotiations to address the deficit.

One proposed solution is for Bangladesh to purchase 25 Boeing aircraft, valued between $6 billion and $8.75 billion, to reduce the trade gap. From the US perspective, this would substantially alleviate the bilateral deficit while strengthening economic ties. However, such a costly acquisition may not align with Bangladesh's economic realities or development priorities, potentially straining its resources. A more sustainable approach involves diversified collaboration in technology, pharmaceuticals, and healthcare, leveraging Bangladesh's emerging industries and the US's advanced technological capabilities to foster a long-term economic partnership.

Strengthening the Technology and Digital Sector for Trade Expansion

Bangladesh's information and communications technology (ICT) sector presents a compelling opportunity for cooperation. With a 7-10% annual growth rate, fueled by the "Digital Bangladesh" initiative and a youthful, tech-savvy workforce, the sector is poised for expansion. The United States, a global technology leader, could significantly increase exports of digital solutions, including software, cloud computing services, and cybersecurity tools. Companies like Microsoft, Google, and Amazon are ideally suited to provide software-as-a-service, cloud infrastructure, and cybersecurity solutions tailored to Bangladesh's needs. Partnerships with Bangladeshi firms such as bKash or Grameenphone could accelerate the adoption of American cloud services, bolstering Bangladesh's goal of becoming a regional tech hub. A $100 million cloud service contract could make a meaningful dent in the $6.2 billion trade deficit, as digital services encounter fewer logistical and tariff obstacles than physical goods. US investments in Bangladesh's IT hubs would promote technology transfer, create high-skill employment, and align with Bangladesh's economic transformation objectives, while providing the US with a growing market for digital exports.

A forward-thinking proposal is the creation of a US-Bangladesh Technology Corridor, fostering collaboration between American companies like Cisco or IBM and Bangladeshi institutions such as BUET, Dhaka University, and BRAC University. By co-developing localized software solutions, this corridor would enhance US service exports and fortify Bangladesh's digital infrastructure. Such a partnership would position Bangladesh as a competitive player in the global digital economy, merging US technological prowess with Bangladesh's cost-effective labor and expanding market. This model offers a sustainable framework for economic cooperation, addressing the trade imbalance while advancing mutual interests.

Pharmaceutical sector

As Bangladesh prepares to transition from least developed country status in 2026, its pharmaceutical industry is set for significant growth, offering another avenue for collaboration. The United States could play a pivotal role by supporting pharmaceutical development, technology transfer, and workforce training, simultaneously addressing the trade deficit and aiding Bangladesh's ambition to become a global hub for affordable, high-quality medicines. Cooperation in producing biosimilars, vaccines, and active pharmaceutical ingredients (APIs) holds particular promise. US pharmaceutical leaders like Pfizer or Merck could establish joint ventures with Bangladeshi firms to manufacture these high-value products, enhancing the quality of Bangladesh's pharmaceutical output for international markets, including the US These partnerships would boost US exports of advanced manufacturing technologies and raw materials, directly contributing to deficit reduction.

The pharmaceutical sector in Bangladesh struggles with a shortage of skilled professionals, particularly in biologics and hormone-based treatments. The US could address this through technical training and academic programs. US universities, with funding from the Bangladesh government, could offer specialized courses in biopharmaceutical research, quality control, and regulatory compliance for Bangladeshi students and professionals. US companies could also set up training centers in Bangladesh to provide practical experience in advanced manufacturing, improving workforce employability and opening new export avenues for US educational services.

Joint research and development (R&D) efforts could further strengthen collaboration, with US firms partnering with Bangladeshi companies to develop new generic drugs or biosimilars. Tools like patent pools or voluntary licensing agreements would enable Bangladeshi firms to produce and market innovative drugs with US support, enhancing US R&D service exports and establishing Bangladesh as a pharmaceutical innovation hub.

A case in point is Samsung Biologics—Asia's largest player in the field—which essentially serves as the face of Amgen in the region. Now, imagine if Bangladesh could secure a similar partnership with Amgen, bringing in both R&D and manufacturing capabilities under one roof. It would be a game-changing leap in knowledge transfer and industrial capacity.

If Bangladesh can forge strategic partnerships with the United States, it has also the potential to emerge as a global hub for drug discovery, development, and manufacturing. The future of medicine lies in personalized therapies—and countries with a large pool of highly skilled young professionals, like Bangladesh, are uniquely positioned to lead this transformation.

Healthcare Technology and Training

The healthcare sector offers additional opportunities to deepen economic ties. The US could expand exports of health technologies, including telemedicine platforms, medical imaging equipment, and AI-based diagnostic tools, to bolster Bangladesh's healthcare system, especially in remote areas. Supplying MRI machines or AI-driven diagnostic software to Bangladeshi hospitals would improve access to advanced care while reducing the trade deficit. Training programs for healthcare professionals are another critical area. With financial backing from the Government of Bangladesh, US universities and hospitals could provide specialized training in cardiology, oncology, or neurosurgery for Bangladeshi doctors, nurses, and technicians, tailored to local needs through partnerships with Bangladeshi medical institutions. Vocational training for medical technologists and pharmacists would further enhance Bangladesh's healthcare workforce, increasing US educational service exports and building long-term capacity.

The successful execution of these strategies would not only narrow the US trade deficit but also support Bangladesh's economic transformation, industrialization, and healthcare advancement. By prioritizing technology, pharmaceuticals, and healthcare, the US and Bangladesh can forge a balanced and sustainable economic partnership. These efforts would strengthen bilateral relations across economic, strategic, and humanitarian dimensions, fostering trust and mutual prosperity for decades. By moving beyond the Boeing proposal and adopting a diversified approach, both nations can unlock new growth opportunities, setting a model for equitable and visionary trade relations.

Dr. Syed Abdul Hamid
Professor, Institute of Health Economics, University of Dhaka