Trump's tariffs an opportunity for Bangladesh to reduce trade deficit, diversify exports

By Md. Abu Saim*

U.S. President Donald Trump’s administration imposed a 37% tariff on Bangladeshi exports to the United States but granted a 90-day exemption as part of a temporary easing of trade restrictions for several countries. This provides Bangladesh with a critical window to reassess its trade policies and address its reliance on the U.S., which accounts for a significant portion of its export revenue.

The tariff primarily affects Bangladesh’s ready-made garment sector, which generates over 90% of the country’s foreign exchange earnings from the U.S. and employs approximately four million people. A sudden imposition of the tariff could disrupt employment, foreign currency reserves, and economic stability. The exemption offers temporary relief but underscores the need for Bangladesh to reduce its trade deficit with the U.S. and mitigate risks associated with dependence on a single market.

In response, Bangladesh, through Professor Yunus’s diplomatic efforts, has proposed measures to align with U.S. trade interests and address the trade imbalance, which stood at $8.4 billion in exports to the U.S. versus $2.2 billion in imports in 2024. These measures include increasing imports of U.S. agricultural products like cotton, wheat, corn, and soybean, establishing a duty-free bonded warehouse for U.S. cotton, implementing a zero-tariff policy on U.S. scrap metals and agricultural imports, gradually reducing tariffs on U.S. goods such as gas turbines, semiconductors, and medical equipment from 70–74% to 45–50%, eliminating non-tariff barriers like complex testing and packaging requirements, and facilitating U.S. tech sector entry, notably through the launch of Starlink in Bangladesh. These steps aim to strengthen bilateral trade relations and encourage the U.S. to lower the proposed tariff to 15–25%.

The U.S. has cited its trade deficit with Bangladesh as a key concern, viewing it as a challenge to national interests amid protectionist policies. Bangladesh’s commitment to reducing the deficit through increased U.S. imports and tariff reductions could foster reciprocity but poses domestic challenges. Lowering tariffs may lead to government revenue losses and heightened competition for local producers, requiring careful balancing of domestic and international priorities. Additionally, Bangladesh’s reliance on U.S. trade policies highlights the risks of political trade dependence, where external policy shifts can significantly impact the economy.

Bangladesh’s heavy reliance on the ready-made garment sector and the U.S. market increases its vulnerability to global trade fluctuations. To enhance resilience, the country is exploring diversification into ICT and semiconductors by leveraging a young, tech-savvy workforce to develop software, outsourcing, and semiconductor industries; expanding into high-margin services like customer support, virtual assistance, and educational services; promoting labor-intensive sectors such as leather goods, handicrafts, ceramics, and light engineering tools to absorb workers and reduce garment dependence; and developing homegrown brands to increase the value of exports through investments in design and digital marketing.

To implement these strategies, Bangladesh must undertake structural reforms, including strengthening export credit and insurance systems to support new industries, investing in education and skills training for ICT and service sectors, upgrading port and logistics infrastructure to meet global standards, and formulating a national trade diversification strategy with clear targets. The introduction of Starlink and openness to collaboration in civil aviation and defense sectors signal a shift toward high-value, technology-driven partnerships, potentially reducing reliance on commodity exports.

The U.S. tariff and subsequent exemption highlight Bangladesh’s exposure to external trade pressures due to its concentrated export sector and market reliance. The 90-day window provides an opportunity to implement strategic reforms, reduce the trade deficit, and diversify exports. By addressing structural challenges and pursuing new trade avenues, Bangladesh can enhance its economic resilience and position itself for sustainable growth in a dynamic global trade environment.

---

*Formerly with the Dhaka University

Comments

Academics urge Azim Premji University to drop FIR against Student Reading Circle

By A Representative A group of academics and civil society members has issued an open letter to the leadership of Azim Premji University expressing concern over the filing of a police complaint that led to an FIR against a student-run reading circle following a recent incident of violence on campus. The signatories state that they hold the university in high regard for its commitment to constitutional values, critical inquiry and ethical public engagement, and argue that it is precisely because of this reputation that the present development is troubling.

Was Netaji forced to alter face, die in obscurity in USSR in 1975? Was he so meek?

By Rajiv Shah This should sound almost hilarious. Not only did Subhas Chandra Bose not die in a plane crash in Taipei, nor was he the mysterious Gumnami Baba who reportedly passed away on 16 September 1985 in Ayodhya, but we are now told that he actually died in 1975—date unknown—“in oblivion” somewhere in the former Soviet Union. Which city? Moscow? No one seems to know.

UAPA action against Telangana activist: Criminalising legitimate democratic activity?

By A Representative The National Investigation Agency's Hyderabad branch has issued notices to more than ten individuals in Telangana in connection with FIR No. RC-04/2025. Those served include activists, former student leaders, civil rights advocates, poets, writers, retired schoolteachers, and local leaders associated with the Communist Party of India (CPI) and the Indian National Congress.

Love letters in a lifelong war: Babusha Kohli’s resistance in verse

By Ravi Ranjan* “War does not determine who is right—only who is left.” Bertrand Russell’s words echo hauntingly in our times, and few contemporary Hindi poets embody this truth as profoundly as Babusha Kohli. Emerging from Jabalpur, Madhya Pradesh, Kohli has carved a unique space in literature by weaving together tenderness, protest, and philosophy across poetry, prose, and cinema. Her work is not merely artistic expression—it is resistance, refuge, and a call for peace.

Asbestos contamination in children’s products highlights global oversight gaps

By A Representative A commentary published by the International Ban Asbestos Secretariat (IBAS) has drawn attention to the challenges governments face in responding effectively to global public-health risks. In an article written by Laurie Kazan-Allen and published on March 5, 2026, the author examines how the discovery of asbestos contamination in children’s play products has raised questions about regulatory oversight and international product safety. The article opens by reflecting on lessons from the COVID-19 pandemic, noting that governments in several countries were slow to respond to early warning signs of the crisis. Referring to the experience of the United Kingdom, the author writes that delays in implementing protective measures contributed to “232,112 recorded deaths and over a million people suffering from long Covid.” The commentary uses this example to illustrate what it describes as the dangers of underestimating emerging threats. Attention then turns...

Aligning too closely with U.S., allies, India’s silence on IRIS Dena raises troubling questions

By Vidya Bhushan Rawat* The reported sinking of the Iranian ship IRIS Dena in the Indian Ocean near Sri Lanka raises troubling questions about international norms and the credibility of the so-called rule-based order. If indeed the vessel was attacked by the American Navy while returning from a joint exercise in Visakhapatnam, it would represent a serious breach of trust and a violation of the principles that govern such cooperative engagements. Warships participating in these exercises are generally not armed for combat; they are meant to symbolize solidarity and friendship. The incident, therefore, is not only shocking but also deeply ironic.

The kitchen as prison: A feminist elegy for domestic slavery

By Garima Srivastava* Kumar Ambuj stands as one of the most incisive voices in contemporary Hindi poetry. His work, stripped of ornamentation, speaks directly to the lived realities of India’s marginalized—women, the rural poor, and those crushed under invisible forms of violence. His celebrated poem “Women Who Cook” (Khānā Banātī Striyāṃ) is not merely about food preparation; it is a searing indictment of patriarchal domestic structures that reduce women’s existence to endless, unpaid labour.

Swami Vivekananda's views on caste and sexuality were 'painfully' regressive

By Bhaskar Sur* Swami Vivekananda now belongs more to the modern Hindu mythology than reality. It makes a daunting job to discover the real human being who knew unemployment, humiliation of losing a teaching job for 'incompetence', longed in vain for the bliss of a happy conjugal life only to suffer the consequent frustration.

India’s foreign policy at crossroads: Cost of silence in the face of aggression

By Venkatesh Narayanan, Sandeep Pandey The widely anticipated yet unprovoked attack on Iran on March 1 by the United States and Israel has drawn sharp criticism from several quarters around the world. Reports indicate that the strikes have resulted in significant civilian casualties, including 165 elementary school girls, 20 female volleyball players, and many other civilians.

Search This Blog