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Seminar on “U.S. Reciprocal Tariffs and the Way Forward for Bangladesh”
The U.S. imposed 37% tariff on Bangladesh’s export to U.S.A. recently though the decision is temporarily suspended for 90 days, however this move is threatening our largest export market and progress in labor and sustainability standards. Bangladesh needs to respond this initiative diplomatically and strategically along with the move for policy reforms to protect and sustain export sectors. Diversifying trade partners and reducing over dependence on a single market are also very important to think about now. We must consider both immediate and long-term solutions, such as expanding non-traditional markets, expediting FTAs, deep and strategic economic diplomacy, improving competitiveness through technology and skill development and addressing long-standing issues in our trade facilitation system.
Above all, a concentrated private and public sector-led approach and strategies are essential to deal this tariff challenge in no time. These were told by Taskeen Ahmed, President of Dhaka Chamber of Commerce & Industry (DCCI) at a seminar on “U.S. Reciprocal Tariffs and the Way Forward for Bangladesh” organized by DCCI in collaboration with Business Initiative Leading Development (BUILD) held on 17 May, 2025 at DCCI.
Commerce Secretary Mahbubur Rahman said Bangladesh is very much positive in terms of reducing trade deficit with the USA by increasing the import of goods and services from the USA. After the imposition of tariff by the US government, Bangladesh has been engaging with them without delay and we are responding in a right way, he added. Regarding cotton import from the USA, he also said that a warehouse can be set up in Bangladesh to expedite Bangladesh’s cotton import from USA. A long-term LNG import agreement has been made with the United States, which will increase bilateral trade between the two countries by almost USD 1 billion. The issue of importing U.S. goods and services from third countries will be presented in the first discussion session of negotiation, so that they treat it as direct import.
Mahbubur Rahman, President of International Chamber of Commerce-Bangladesh (ICC-B) suggested to continue negotiation effectively. As an active member of the World Trade Organization, the way the United States has imposed reciprocal tariffs is not desirable, he said. Private sector’s interaction with the current government is not up to the expected level, however it should be much stronger, he commented. He also suggested to reduce reliance on single market by expanding exports to new regions particularly in Asia, Middle East and Africa. He later said that diversifying product range into high-value and knowledge based sectors will improve competitiveness and long-term growth.
Chairperson of BUILD Abul Kasem Khan emphasised examining the feasibility of signing free trade agreement with the United States. He also said that adequate policy support is needed for the diversification of export products and further requested for formulating a roadmap for expanding new export markets. It would have been better for Bangladesh if the country could be a member of ASEAN but how much Bangladesh is compliant and ready for that, it needs to be identified, he added, For better trade facilitation and ease of doing business, government should provide required policy support to the private sector at a faster pace, he said. Later, he requested the government to allow offshore investment of Bangladeshi companies which actually will facilitate better supply management with reduced cost.
Dr. Debapriya Bhattacharya, Distinguished Fellow, Centre for Policy Dialogue (CPD) presented the key note paper. At first he said that every crisis has made a new opportunity. This tariff war will also create an opportunity like industry relocation that Bangladesh can tap the scope. Regarding US tariff, he said that it will ultimately impact the consumers and they will have to bear the extra cost, so it is obvious that market nature will not accept this move easily. And if the market does not accept it, he expressed his doubts about how effective it will be in the end, adding that the issue is not only economic, but also largely a geopolitical issue. In this regard, he said that the U.S. has given more importance to trade in goods instead of the service sector while imposing of tariffs which was not realistic. He therefore suggested to bring the service sector trade with the USA into the notice of the US government while negotiation. Debapriya Bhattacharya also said that although the LDC markets are not important to the United States, but the U.S. market is important for Bangladesh, therefore, effective, well-organized and multi-dimensional steps should be taken involving the private sector in the matter.
Md. Mezbaul Haque, Executive Director of Bangladesh Bank, said that the tariff shock will create a price war that will lead to the need of increasing efficiency and cost reduction. He later said that the supply of money in the market is quite good now, but the pressure on the banking system is increasing due to more reliance on banks to meet the financial needs of the industry. If the structural efficiency of the financial market is not ensured, financial management stability will not come, he opined.
Dr. M. Masrur Reaz, Chairman of Policy Exchange of Bangladesh, suggested charting the political economy of the U.S.A. first and taking a well preparation before react. He said that Bangladesh’s import demand of cotton, soybean and LNG is continuously increasing, so bilateral talks with the US should continue including these products for win-win benefits. He later emphasized on enhancing the capacity of logistics sector of Bangladesh to increase our competitiveness in the long run, because our logistics cost is relatively higher than the neighbouring countries.
Shams Mahmud, former President of Dhaka Chamber and Managing Director of Shasha Denims Ltd., said due to tariff hike, we will be fighting for orders in future as the demand of products may fall in the U.S. market due to price hike. He said that Bangladesh’s import of U.S. products from third country should be considered as direct import by the U.S. government and we have to raise this issue while negotiating. He also said that the reforms taken by the present government should not be a mare routine work rather the reform should be done in real sense and in an effective manner so that people get its benefits shortly. Government is keen to change the business environment across the country and it is very essential for us right as this moment. Later he urged the government to ensure adequate power and energy supply to the industries for smooth production.
Engr. Razeeb Haider, Director, Bangladesh Textile Mills Association (BTMA) said that about 45 percent of the production of the textile sector has gone down due to lack of gas supply. Recently gas pressure has gone down drastically in the industries. He said that the cotton of the United States is relatively expensive and the quality is also very good, but the entrepreneurs here are discouraged to import cotton as it takes more than three months to import. To solve this problem, he opined that if American cotton exporters are provided with warehouse facilities in Bangladesh, the import of cotton by Bangladesh will increase fourfold.
DCCI Former Presidents Aftab-ul Islam, Osama Taseer, Barrister Md. Sameer Sattar, DCCI Senior Vice President Razeev H Chowdhury and Vice President Md. Salem Sulaiman and members of the Board of Directors were also present in the seminar.
Published on: 2025-05-17