US tariff strategy demands smart diplomacy, structural reforms in Bangladesh: Experts
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The United States' evolving reciprocal tariff policy poses both risks and opportunities for Bangladesh, and the country must prepare strategically to appropriate 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, held 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.
The paper said that a forward-looking, diversified export strategy—backed by smart diplomacy, structural reforms, and private sector innovation—is essential for Bangladesh to thrive under 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 Tariff Commission, warned of growing trade policy uncertainties.
"Global LDC exports account for only 1.2 per cent of total trade," he said.
Mr Askari pointed to the United States Trade Representative (USTR) report that 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.
“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 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 also 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 per cent hike in gas prices 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 high 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.
However, he also found a positivity in the US tariff.
“If reciprocal tariffs reduce fuel and commodity prices, it might ease inflationary pressure,” he said.
He also said that 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 reallocation in terms of imports might be held by the US, which should be tapped, he said.
He said Bangladesh lacks an industrial policy or clear roadmap for manufacturing industries.
India and Brazil have gone far ahead in the automobile industry.
"Bangladesh must eye on the automobile industry through appropriating a comprehensive industrial policy. We have to make our own engines," he said.
He also put emphasis on the bargaining power, domestic manufacturing capabilities, and comprehensive industrial planning to ensure resilience in a shifting global economy.