Trump's tariff policy poses risks, also offers opportunities: Experts

The United States' reciprocal tariff policy poses risks as well as offers opportunities, but Bangladesh must prepare strategically for the changing global trade landscape, experts said at a seminar on Sunday.

The seminar titled "Emerging Landscape of Trade: Trump's Tariff Policy and Its Implications for Bangladesh" was organised by DACCA Institute of Research and Analytics at the Bishow Shahitto Kendro in the city.

Dr Kazi Iqbal, Research Director at the Bangladesh Institute of Development Studies (BIDS), chaired the session, while Dr Deen Islam, Associate Professor at Dhaka University, presented the keynote paper.

According to the paper, a forward-looking, diversified export strategy-backed by smart diplomacy, structural reforms, and private sector innovation-is essential for Bangladesh to thrive in the new trade regime.

"Being prepared will determine whether Bangladesh is sidelined or elevated in the new trade architecture," said Dr Islam, stressing that tariff wars, shifting alliances, and non-tariff barriers require both tactical and long-term responses.

Md Mamun-Ur-Rashid Askari, Joint Chief (International Cooperation) at the Bangladesh Trade & Tariff Commission (BTTC), warned of growing trade policy uncertainties.

"Global LDC exports account for only 1.2 per cent of the total trade," he said, pointing out that the United States Trade Representative (USTR) report emphasised non-tariff issues, including trade facilitation, subsidies, intellectual property rights, and technical barriers.

"Our export market remains highly concentrated and costly, and trade facilitation could significantly reduce business costs," he said. He also expressed concerns over Bangladesh's preparedness for LDC graduation.

"The WTO non-compliance issues must be resolved to attract investors," said Askari, calling for swift implementation of the National Tariff Policy 2023 to address tariff anomalies.

Shams Mahmud, former President of the Dhaka Chamber of Commerce and Industry (DCCI), said that Bangladesh might benefit from the shifting of Chinese factories due to the US-China trade tension.

However, he cautioned that fake products, unregulated digital markets, and undercutting among local firms pose serious threats to sustainability.

Citing the example of Angola, which postponed its graduation due to economic stress, Mahmud argued that Bangladesh's private sector remains underprepared, especially in adopting green energy and value-added production.

Bangladesh's weak logistics and infrastructure systems were also flagged as critical bottlenecks.

"A 33-percent hike in gas price has further strained industries. Older factories are paying Tk 30 per unit, while new ones are charged Tk 40," he said.

Yarn imports from India have become difficult due to procedural challenges - it hurts especially 850 SMEs lacking proper banking relationships, he said.

He also criticised the slow automation of port operations and air cargo pricing policies, stating that inefficiencies lead to significant financial damage, with shipping delays costing up to $1.0 per kg in exports.

On the positive side, he said: "If reciprocal tariffs reduce fuel and commodity prices, it might ease inflationary pressure."

He further said the existence of US cotton warehouses in Bangladesh provides certain comparative advantages for local manufacturers.

Dr Kazi Iqbal said that Bangladesh's long-standing relationship with Western buyers-especially in garments-will not dissolve overnight.

A re-allocation in terms of imports might be done by the US which should be tapped, he said.

He also pointed out that Bangladesh lacks an industrial policy or clear roadmap for manufacturing industries.

India and Brazil have gone far ahead in the automobile industry. "Bangladesh must look to the automobile industry through appropriating a comprehensive industrial policy. We have to make our own engines," he said.

He also emphasised on enhancing bargaining power, domestic manufacturing capabilities, and comprehensive industrial planning to ensure resilience in a shifting global economy.

tonmoy.wardad@gmail.com