The 'reciprocal tariff' imposed on Bangladesh by US President Donald Trump will be added to the tariff rate that products already faced, meaning the recently imposed tariff will on shipments to the nation's single-biggest export destination could deal a crippling blow.
According to US International Trade Commission data, Bangladeshi goods exported to the US last year faced around 15% duty on average.
If the 35 percent counter-tariff that was announced by Trump earlier this week is implemented, the total tariff rate would balloon to 50 percent.
This significant rise in duties would spell disaster for the Bangladeshi export sector, especially the ready-made garments (RMG) and leather sectors, which account for around 90% of the nation's export earnings, according to Professor Mostafizur Rahman, a distinguished fellow at the Center for Policy Dialogue (CPD).
He told Dhaka Stream that this duty would pose a big hurdle for Bangladesh when it comes to competing with other countries for the US market.
"The 35% tariff has widened the gap with competitor countries in the global market. Vietnam will face 20% in excise duty. Bangladeshi products will have a 15% higher tariff."
How the reciprocal tariff came about
On April 2, Trump declared a "national emergency" over persistent trade deficits, and announced sweeping reciprocal tariffs during his address to the nation.
To address this crisis, the US president said he had signed an executive order declaring the imposition of 'reciprocal tariffs' on more than 180 countries.
He went on to christen the moment, declaring it "Liberation Day".
That very day, a tariff of 37 percent was announced on Bangladeshi goods, half the rate of Bangladeshi tariffs on US products.
Trump, who had promised to impose retaliatory tariffs on the election trail, had delivered less than three months after taking office.
While announcing the tariffs Trump said, "Many countries have robbed us, enemy and ally alike, for decades."
Stating that other countries had no reason to be upset with the decision, Trump said, ""Whatever they charge us with, we're charging them. How could anyone be upset? But they will still be upset, because we never charged anyone before."
It was declared that the tariffs would be implemented from April 9.
However, Trump offered a 90-day reprieve, allowing room for discussion.
On April 3, Shafiqul Alam, the Press Secretary to the Chief Adviser, stated through his verified Facebook page that Bangladesh was reviewing tariffs on imported US products.
But Trump declared in a letter on Monday that the US would impose a 35% tariff on all Bangladeshi products from August 1.
What was in the letter
"Our relationship has been, unfortunately, far from reciprocal. Starting on August 1, 2025, we will charge Bangladesh a tariff of only 35% on any and all Bangladeshi products sent into the United States, separate from all sectoral tariffs. Goods transshipped to evade a higher tariff will be subject to that higher tariff.
"Please understand that the 35% number is far less than what is needed to eliminate the trade deficit disparity we have with your country.
"As you know, if a company within your country decides to build or manufacture products within the US, there will be no tariff on those products."
Rahman also spoke about the complexity of reaching a deal, especially when taking into consideration the fact that Bangladesh is a member of the World Trade Organization (WTO) and must adhere to its regulations.
"Vietnam has declared that they will provide zero tariff benefits to all imports from the US. Bangladesh has said the same. But since it is a WTO member, Bangladesh has to provide the benefit to other countries as well. The United States may raise an objection to this. Only policy-makers can say whether there are other demands."
"From what I have heard, we will provide zero-duty access to US imports. They also said that US investments face several hindrances here, and that is also being addressed. But Bangladesh has bilateral relations with other countries.
When asked about what Bangladesh should do at this stage, Rahman said, "Negotiations can be held till August 1. There is still an opportunity. Discussions must continue. The next three weeks need to be utilised. A team has departed for the US.
"Apart from the US, relationships with other countries must be considered. We may give some thought to whether other concessions can be made in some places. Tariffs should be reduced at least to the level of Vietnam. That would allow exports to continue."
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