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The United States has imposed a steep 37 per cent tariff on Bangladeshi exports, raising concerns about the resultant economic fallout and declining trade competitiveness for Bangladesh.

Exporters and economists have urged the government to take both diplomatic and strategic measures to mitigate the impact.

Economists and exporters alike expressed apprehension about the calculation method behind the US  claim that Bangladesh imposes a 74 per cent tariff on its imports.

As part of sweeping global tariffs at significantly higher rates than before, President Donald Trump announced hefty duties on multiple countries, calling the day of the announcement America’s ‘Liberation Day.’

As part of the new tariff structure, Bangladesh has been slapped with a whopping 37 per cent tariff, based on the Trump team’s calculation that as the country imposes 74 per cent tariffs on imports from the US so it has halved the amount making 37 per cent for being ‘reciprocal’.

Currently, most Bangladeshi goods face a 15 per cent tariff from the US.

In 2024, Bangladesh exported to the US about $8.4 billion in goods, of which $7.34 billion accounted for readymade garments.

The US goods exports to Bangladesh in 2024 were worth $2.2 billion, meaning that the trade deficit was $6.2 billion for the US.

Among major competitors, China faces 34 per cent tariff, Vietnam 46 per cent, Cambodia 49 per cent, and Sri Lanka 44 per cent while India and Pakistan face 26 per cent and 29 per cent respectively.

Centre for Policy Dialogue distinguished fellow Mustafizur Rahman on Thursday told ¶¶Òõ¾«Æ· that the high duty would increase the prices of Bangladeshi goods in the US, reducing their demand and negatively impacting the exports.

However, since competitors face similar tariffs, the overall competitive environment may remain stable.

He warned of a possible trade war as China and the EU have already voiced strong opposition to the move.

‘If a global trade war erupts, it will slow down global trade and economic growth, affecting demand in our key markets,’ he said.

He urged the government to engage in bilateral discussions to understand the basis for the 74 per cent duty claim, particularly since Bangladesh imposes little to no duty on many US imports, including a zero tariff on cotton.

He suggested addressing the issue through the Trade and Investment Cooperation Forum Agreement (TICFA) and focusing on enhancing competitiveness, reducing business costs, and diversifying markets.

Zahid Hussain, former lead economist at the World Bank’s Dhaka office, echoing similar concerns, told ¶¶Òõ¾«Æ· that the higher tariff would hurt Bangladesh’s exports due to a decline in US consumer demand.

He also said that overall price increases due to the high tariff would reduce consumers’ purchasing capacity.

He stressed the need for Bangladesh to engage in negotiations for the clarification of the 74 per cent tariff calculation and to highlight any recent reforms that could justify an exemption.

However, he pointed out that since similar tariffs have been imposed on competitors, Bangladesh’s relative market position would not necessarily weaken.

He expressed optimism, noting that diplomatic negotiations could help lower the tariff.

South Asian Network on Economic Modelling executive director Selim Raihan has expressed deep concern.

He also questioned the US methodology for calculating the reciprocal tariff, saying that it signalled a significant structural shift in the global trading system.

The economist, in a video statement on social media, said that the tariffs introduced under the Trump administration violated the Most Favoured Nation (MFN) principle in global trade.

‘This imposition will not only harm Bangladesh but also many other developing countries,’ he warned.

Selim said the United States is the single largest export destination for Bangladesh’s apparel industry and the new tariff could significantly hamper its exports.

He also said that Bangladesh’s pharmaceutical and leather goods sectors would face difficulties in the US market in addition to readymade garments.

He urged Bangladeshi policymakers to engage with their US counterparts to address concerns over the tariff, mainly to make clear the ambiguity surrounding its calculation.

The economist emphasised the need for Bangladesh to enhance its competitiveness and reduce its high reliance on the RMG sector through the diversification of export goods.

‘For a long time, Bangladesh has relied on a low-paid labour force to maintain its competitiveness, which is inhuman. Meanwhile, competing countries have built their competitiveness on skilled labour, efficient infrastructure, and favourable policies, including foreign direct investment,’ he said.

Selim also underscored the importance of pursuing free trade agreements to maintain Bangladesh’s competitiveness, particularly as the significance of the WTO-led rules-based trading system continued to decline.

Faruque Hassan, former president of the Bangladesh Garment Manufacturers and Exporters Association, called for diplomatic, political, and commercial measures to resolve the issue.

He questioned how the US arrived at the 74 per cent duty figure, emphasising that most US exports to Bangladesh face minimal tariffs, with cotton having a zero import duty.

‘The US cites tariffs, currency manipulation, and non-tariff barriers as reasons, but Bangladesh does not have such issues [with it],’ he said.

He called for resolving the dispute through negotiations rather than retaliatory duties, urging a ‘win-win’ approach.

He too said that that since competing nations also face high tariffs, Bangladesh’s export sector would not be disproportionately affected.

Fazlul Haque, managing director of Plummy Fashion, said that the immediate impact of the US reciprocal tariff on Bangladesh will be price pressure on manufacturers from US buyers.

‘However, I do not believe the country’s apparel exports will be heavily affected, as we largely export basic garments,’ he added

He said that Bangladeshi manufacturers would inevitably have to lower product prices in response to growing buyer pressure, and the government should convene a meeting with stakeholders without delay to devise a strategy to manage the challenges posed by the new US tariff. 

He said that while exports would hopefully not decrease significantly, policy support would be needed to face the challenges coming from the US tariff.

Abdullah Hil Rakib, managing director of Team Pharma, told ¶¶Òõ¾«Æ· that they hope the government will take action, especially chief adviser Professor Muhammad Yunus will take proper measures to lower tariffs on US goods.

Meanwhile, in a statement, chief adviser’s press secretary Shafiqul Alam said their ongoing work with the US government is expected to help address the tariff issue.

‘Bangladesh is reviewing its tariffs on products imported from the United States,’ said the press secretary.

He said the National Board of Revenue is identifying expeditious options to rationalise tariffs, which is necessary to address the matter. 

‘The United States is a close friend of Bangladesh and our largest export destination,’ he added.

The press secretary said they have been working with the US since the Trump administration took over to enhance trade and investment cooperation between the two countries.