Will Trump 2.0 change US policy towards Bangladesh?

After a contested election this November, Donald Trump has ensured a decisive victory, reclaiming the presidency in the White House. This election outcome has resonated around the world, with countries thinking of assessing the ramifications in their bilateral and multilateral relationships with the United States. This is also more apparent in Bangladesh, where political change has reached new heights in the last few months with the new interim government led by Dr Muhammad Yunus.

However, there have been no ordinary events in Bangladesh for the past year. With the mass movement that caused former Prime Minister Sheikh Hasina to be ousted in August 2024 comes a new pathway in the country's domestic politics and its foreign relations. Under the interim administration of Yunus, the country's leadership has engaged with the international community in trying to chart a new course for Bangladesh and pave the way for being considered a partner of choice by the global powers.

Donald Trump's return to the Oval Office could muddle this delicate balance. With favouring the 'America First' approach, Trump's scepticism about foreign aid and nation-building and his penchant for transactional diplomacy may all have significant implications for Bangladesh-US relations. Moreover, his recent comments criticising the "barbaric violence" against minorities in Bangladesh have added to the apprehension in Dhaka.

However, as Bangladesh undergoes this development, it must confront a series of critical questions: What would a second Trump presidency mean for US policy towards Bangladesh? What will be the Yunus factor in the decision about the way the bilateral relationship will move? What are the economic, trade, and strategic implications? 

Similarly, how Bangladesh should prepare itself to engage with the new administration in Washington proactively and safeguard its interests would be another significant factor.

Potential shift in US foreign policy focus

During his first term, Trump's 'America First' policy was exemplified by a greater transactional element of diplomacy, a reduced emphasis on traditional alliances and multilateralism, and increased attention to economy and trade diplomacy over broader geopolitical concerns. Analysts argue that this time, along with the world, it would have serious implications for Bangladesh, a country managing a relatively stable and cooperative relationship with the US in recent years. 

Under the Biden administration, the US has been assisting Bangladesh with substantial development and humanitarian aid to support its transition and technical assistance to enable it to perform much-needed reforms.

However, a Trump-led White House might be less enthusiastic about that approach. Michael Kugelman, director of the South Asia Institute at the Wilson Centre, said, "Trump wouldn't be keen to portray a US relationship with another country (especially one not in a treaty) as involving various forms of US aid." 

The president will instead look to address issues of great power competition and trade, areas that received notable attention during his first term when he met with Bangladesh.

Such a shift in focus could be discouraging for the interim government in Dhaka, which has been touting US support as it tries to stabilise the country and implement essential reforms. In this respect, Trump's foreign policy agenda that is focused on transactional diplomacy and trade imbalances may not be an easy fit with the Yunus administration's particular emphasis on democratic consolidation, economic revitalisation, and social justice.

In addition, the US has tended under the Trump administration to be more willing than the prior administration to be sceptical about nation-building efforts and to prefer a more transactional approach to foreign relations, making it more difficult for Bangladesh to get the sustained support and engagement it requires from the US as it undergoes the complex transition.

Yunus factor and the grounds of tensions

The rise of Muhammad Yunus to the helm of Bangladesh's interim government has been a remarkable development, one that has catalysed a new shift in the country's relationship with the United States. A Nobel Peace Prize laureate and a globally recognisable person, he has always had strong ties with the Democratic Party and has been a critic of Trump. 

The unfolding of this ideological divergence between Yunus and Trump is a potential source of tension between Bangladesh and the US in its evolving relationship.

Also, Yunus's liberal politics and his proximity to the Democratic establishment, people like Clinton, could be seen as a target of suspicion and potential hostility from the Trump administration. 

One thing that should be noted is that the Biden administration's warm embrace of the Yunus-led interim government has played a unique role in the revitalisation of Bangladesh-US relations over the past months. The progress could be jeopardised by Trump's shift towards a more transactional foreign policy under which Washington may be less willing to provide continued American support for the interim government's efforts for its reform agenda and democratic consolidation.

Trade and economic implications

The economic dynamics of the Bangladesh-US relationship have been a crucial area of focus for both countries in recent years. Since January 2024, bilateral trade has been greatly underlined with the imports of 6.1 billion from Bangladesh, while the exports were 1.5 billion US dollars as of September. 

Also, the US is now one of the largest sources of foreign direct investment in Bangladesh. Nevertheless, in the years since, bilateral trade volume and American FDI flows have fallen between 2022 and 2023. Inflow from the USA amounted to $314.90 million in 2023, a decrease from $354 million in 2022.

Crucially, coupled with Bangladesh's ongoing political transition, this economic slowdown could make it difficult for the country to fully exploit the trade and investment potential that might be pursued by a Trump-led White House. Trump's protectionist trade policies, including his first-term move to impose higher tariffs on Chinese goods, where to some extent considered a windfall for Bangladesh's export-driven industries—notably its vital garment sector.

Nevertheless, the overall economic spectrum and the danger of a global trade slowdown may offset, if not scuttle, any of those potential gains, especially if the Yunus government struggles to rejuvenate Bangladesh's economic fortunes in the near term.

Strategic alignment and the need for proactive diplomacy

With the change of power in the White House, there is a growing apparent concern in Dhaka regarding the fears that Washington may view Bangladesh through India's lens. This situation can get even more muddled if the Trump administration is viewed as more likely to line up with India's concerns about Bangladesh's minority rights record. 

Even as the interim government reassures the world that it will uphold the rights of every citizen, this might likely put stress on the Bangladesh-US relationship. 

However, Trump's election has given rise to a new enigma in Bangladesh as it grapples with the possible implications for its political and economic shifts in recent months. The US foreign policy, regardless of the party in power, may temper the extent of the disruption. 

According to analysts, the core components of the US-Bangladesh relationship—economic cooperation, regional stability, and countering terrorism—are expected to persist even when a second Trump administration takes office. 

Yet, the Yunus-led interim government needs to take the initiative to talk to Washington, trying to bring Bangladesh's strategic and economic interests on the same wavelength. 

Since the US is very significant in amicably coaxing Bangladesh to gear up and flourish economically and socially, it will be rather important to keep the interests of Bangladesh well-represented in Washington by engaging with a wide audience of all the US political and policy stakeholders, from Congressional leaders to think tanks and industry groups.

At the same time, Dhaka should consider ways to work for economic and security cooperation that would be aligned with Trump's 'America First' approach. This might involve, for example, attracting US investment in infrastructure or manufacturing projects and deepening collaboration on counterterrorism and maritime security initiatives. Hence, Bangladesh should not shirk from asserting its own interests and values, even if they diverge from the Trump administration's standpoints. 

The future of Bangladesh-US relations under a second Trump presidency is, however, unpredictable. It will largely depend on the new dimensions of Trump's new policies and trajectories. However, if the Yunus government remains strategic, nimble, and principled in its approach, it can do that to keep the gains of the recent years and help Bangladesh chart its way in the long term on the global stage.

Kawsar Uddin Mahmud is a political analyst and international relations writer based in Dhaka. He can be reached via: kawsarduir@gmail.com

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.