By
Bloomberg
Revealed
April 7, 2025
Bangladesh is seeking to maintain talks with the Trump administration in a bid to minimize the blow from a US resolution to impose a 37% tariffs on items that would devastate the nation’s $40 billion garment export trade.
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Bangladesh is in search of methods to scale back its commerce surplus with the US to assist lower the obligation the nation will now need to pay for its exports to America, officers stated. The speed on Bangladesh is among the many highest Trump imposed on any nation, and will trigger a shock to one of many world’s poorest nations, which depends closely on textile exports to help its economic system.
“We’re actively exploring opportunities to reduce the gaps,” Sk. Bashir Uddin, Bangladesh’s de-facto commerce minister, stated in a phone interview Thursday.
With clothes accounting for almost 90% of Bangladesh’s whole exports to the US, its largest clothes purchaser, the stakes are excessive for the economic system. The nation remains to be recovering from a political disaster final yr following the ouster of the previous chief Sheikh Hasina and is reliant on overseas help, together with from the Worldwide Financial Fund.
The brand new tariffs are primarily based on US bilateral commerce deficits somewhat than product-specific standards, a components that some analysts stated was unfair to many small economies with important commerce surpluses like Bangladesh.
Bangladesh’s authorities held talks with key stakeholders, together with the Export Promotion Bureau, to evaluate the tariffs. Among the many choices to slim the commerce imbalance with the US is to extend imports of American items like uncooked cotton, officers stated.
“We can increase our imports of cotton from the US market, but we need to establish a reliable supply chain for American cotton,” stated Anwar Hossain, administrator of the Bangladesh Garment Producers and Exporters Affiliation.
Main US retailers reminiscent of Walmart Inc. and Hole Inc. supply billions of {dollars}’ price of clothes from Bangladesh yearly. A tariff hike might immediate them to reassess sourcing methods, in keeping with Hossain.
Bangladesh’s exports to the US rose 1.1% to $8.4 billion in 2024 from a yr earlier, in keeping with the Workplace of the US Commerce Consultant. US exports to Bangladesh declined 1.5% to $2.2 billion, it stated.
The tariffs will make it tougher for nations like Bangladesh to attain their respective bail-out program targets set by the IMF, in keeping with Ankur Shukla, a South Asia economist for Bloomberg Economics in Mumbai.
“This could put the fund’s loans to these countries at risk — compounding the downside risk to growth,” he wrote. There’s some upside for Bangladesh as a result of its tariffs had been set at charges decrease than opponents within the garment sector reminiscent of Sri Lanka at 44% and Vietnam at 46%, which “could provide a comparative advantage to Bangladesh and help it grab some market share.”
Officers say there could also be scope to regulate tariffs as a part of reciprocal commerce talks. Nonetheless, there are “clouds surrounding the US decision,” in keeping with Bashir Uddin, who holds a ministerial rank within the interim cupboard led by Nobel Prize laureate Muhammad Yunus.
“This is not a bilateral issue anymore — it has become a global economic tsunami,” Uddin stated.
