A Bangladeshi delegation, led by Commerce Adviser Sk Bashir Uddin, began the third round and crucial final round of talks on Bangladesh-US trade issues, with the United States Trade Representative, the chief trade negotiation body of the US government.
Informal discussions were held on Tuesday, with the talks to resume on Wednesday at 9am local time, centring the tariff issue.
Why it matters: Since Donald Trump announced sweeping tariffs against a host of nations on April 2, a day he christened "Liberation Day", the fear of job losses has been rippling through Bangladesh's garment hubs.
- The imposition of the tariffs were delayed twice to allow nations time to negotiate better terms, and are now set to kick in at the start of next month.
- While some, including Vietnam, a major competitor in the global garments trade, have succeeded in getting more favourable deals, Bangladesh has been struggling to make headway.
- Even more worrying is the fact that the US is Bangladesh's single-largest export destination, meaning any tariff could have significant impact, let alone the proposed 35%.
- According to a study published by local think-tank Centre for Policy Dialogue, even a 5% additional tariff on the Freight on Board (FOB) price would be difficult to absorb for Bangladesh's apparel industry, which accounts for over 80% of the nation's annual export earnings.
- Experts also opine that the burden of the tariff hike will fall largely on garment manufacturers and the millions of workers they employ, posing risks to the economy in terms of slower growth, job cuts and a rise in poverty.
Zoom in: In mid-July, Commerce Secretary Mahbubur Rahman said the US demanded zero-duty facilities for a number of its products, although he did not specify beyond that.
- Bangladesh exports goods worth more than $8 billion to the US annually while importing around $2 billion worth, according to the Export Promotion Bureau.
- As such, several moves are being planned to shrink its trade surplus with the US, which Trump based his tariffs on, by increasing imports from the nation.
- Interestingly, in a meeting the US Chargé d'Affaires on Monday, CA Yunus made it clear that counter-terrorism is a top priority for his interim government.
- Bangladesh has ordered 25 aircraft from Boeing and ramped up imports of key American goods in an effort to defuse trade tensions and bring down the steep tariffs imposed by the Trump administration, a senior official said on Sunday.
- "We need new aircraft urgently, possibly within the next couple of years," Commerce Secretary Mahbubur Rahman told reporters. "Initially, it was 14 planes — now it's 25."
- Alongside the aircraft deal, Bangladesh is boosting imports of wheat, soybean oil and cotton from the United States.
- A new agreement signed earlier this month will see the country import 700,000 tonnes of US wheat annually over the next five years.
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