Trump’s Reciprocal Tariff: An Unjustified Blow to Bangladesh

Trump’s Reciprocal Tariff: A Major Economic Disruption

The reciprocal tariff imposed by U.S. President Donald Trump on exports to the U.S. from various countries is a seismic shift for the global economy, akin to an economic tsunami. Such a move has been unprecedented in the past 100 years.

The imposition of this tariff on Bangladesh, a Least Developed Country (LDC) under the WTO framework, is unwarranted. Nevertheless, it has been enforced, posing a significant setback for us.

At first glance, it appears that the tariff rate was determined based on the trade deficit, calculated solely on the volume of goods traded between Bangladesh and the U.S. However, the import of various services from the U.S., including technology, banking, and insurance, was overlooked. Had these service imports been factored in, such a steep reciprocal tariff on Bangladeshi exports might not have been imposed. Many aspects of the situation remain unclear, and we are actively working to gain a comprehensive understanding before formulating a response.

Following Trump's announcement of the reciprocal tariff in Washington, D.C., I immediately convened a three-hour meeting on Thursday with the Commerce Secretary, the Chairman of the National Board of Revenue (NBR), and the Vice Chairman of the Export Promotion Bureau (EPB) to analyze the situation. Additionally, we have been in communication with the Bangladeshi ambassador to the U.S. to seek further clarification. A meeting with all relevant stakeholders, called by the Finance Adviser, is scheduled for Sunday to discuss potential action plans.

This issue extends beyond Bangladesh; it is a global challenge. We are closely monitoring how major economies are reacting and what countermeasures they are adopting. It remains uncertain whether this matter can be resolved through bilateral or multilateral negotiations. However, if a bilateral approach proves viable, the government will take necessary steps in that direction.

Our primary objective is to minimize the tariff impact on Bangladeshi exports. If required, we may consider policy adjustments to increase imports from the U.S. to ease the tariff burden, though our options under WTO regulations are limited.

Since the announcement of the reciprocal tariff, I have been assessing the broader implications and closely following international responses. It may take one or two weeks to fully grasp the situation, after which the government will determine its course of action.

As Commerce Adviser, I can assure that the government is committed to protecting our exports from adverse effects. Bangladesh currently imports approximately $2 billion worth of goods from the U.S. while exporting between $7 billion and $8 billion. Given this favorable trade balance, we are exploring the possibility of increasing imports from the U.S. if it helps mitigate the tariff burden. To this end, we are maintaining active communication with the U.S. embassy.