Higher US tariffs on India, China could divert up to $2.32b export orders to Bangladesh, says Zahid Hussain

The higher tariffs on India and China imposed by the United States could divert $1.27–$2.32 billion in export orders from these countries to Bangladesh in the current fiscal year, FY2025-26, said Dr Zahid Hussain, former lead economist at the World Bank’s Dhaka office.

The economist added that a 30 per cent higher tariff on India alone could divert $1.2–2.07 billion in orders, while those from China could range from $74 million to $250 million.

Zahid Hussain made the remarks while speaking at the “Moazzem Hossain Commemorative Lecture,” organised by the Economic Reporters’ Forum (ERF) in Dhaka on Saturday in memory of its founder president, late Moazzem Hossain, who was also the founding editor of the Financial Express.

Mahbubur Rahman, chairman of International Publications Limited (IPL), the parent company of the Financial Express, addressed the event at the ERF auditorium, which was presided over by ERF president Doulot Akter Mala.

Highlighting Moazzem Hossain’s tireless efforts in establishing the Financial Express and his skill in building it as an economic newspaper, he said, “All of the investors and journalists also had confidence in Moazzem Hossain.”

He has been able to live up to that trust, Mahbubur Rahman, who is also president of the International Chamber of Commerce Bangladesh (ICCB), said, noting that Moazzem Hossain not only turned the Financial Express into a reliable outlet for economic news but also made it a profitable institution.

Mahbubur Rahman said Moazzem Hossain’s capacity in economic journalism and his ethical standards were exceptional, noting that even after his passing, the Financial Express continues to uphold those principles.

He added that the Financial Express has never indulged in “YOLO journalism,” reporting solely on facts and issues, including misuse of official power, violations of central bank rules, and mismanagement in private sector boards, without taking sides for or against any industrial group.

“The mismanagement stems from those running the government. Without their complicity, no single individual—or even five or ten people—could have undermined the entire system,” he said.

While delivering the speech on “Macroeconomic Challenges and the Way Forward,” Dr Zahid Hussain said economic activity in Bangladesh has picked up and overall stability has improved compared to FY2022-23.

However, he cautioned that conditions at the household level have worsened, with rising poverty and inequality.

“Economic stability has been restored mainly due to the removal of those responsible for previous instability,” he said, adding, “Money laundering from the country has stopped, leading to a sharp fall in informal money transfers and a rise in foreign currency inflows.”

He noted, however, that the true condition of banks has yet to improve, as defaulted loans continue to mount, despite the cessation of large-scale looting in the sector.

Dr. Hossain also highlighted international developments favourable to Bangladesh’s economy, particularly the notable depreciation of the US dollar.

Addressing the role of policy, Dr. Zahid Hussain said it has not played a major part in the country’s current economic stability.

 “There has been a shift in economic management, with greater discipline in policymaking. But this does not mean all government decisions are correct,” he noted.

Despite some positive signs, he warned that Bangladesh remains stuck in the middle-income trap.

“Key obstacles include the ongoing power and energy crisis, a stressed banking sector, and weaknesses in the logistics system, underdeveloped labour markets, and institutional decay,” he said.

Highlighting the reform efforts of the interim government, Dr. Zahid stressed that political will is necessary to ensure reform; however, it alone is not enough.

Effective reform requires strong implementation capacity and this calls for coordinated action among the Council of Advisers, the administration, the business community, and civil society, he said.

 “Without collaboration among these four groups, reforms are likely to stall,” he said.

Commenting on the current Council of Advisers, he described them as “sincere and courageous in some areas, yet helpless or lacking direction in others.”

The ERF held the first lecture in memory of the late Moazzem Hossain in 2020, attended by Dr. Mashiur Rahman, former adviser to the Prime Minister.

Last year, Dr. Debapriya Bhattacharya, distinguished fellow at the Centre for Policy Dialogue (CPD), delivered the second such lecture on Moazzem Hossain.

Abul Kashem, general secretary of the ERF, moderated the third edition of Moazzem Hossain Commemorative Lecture.

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