Reciprocal tariff may decrease further if imports from the US increase

If Bangladesh can reduce its trade deficit with the United States by increasing imports, the reciprocal tariff imposed by the US on Bangladeshi goods may be lowered further, the visiting US trade delegation has given this assurance.

Commerce Adviser Sheikh Bashiruddin briefed reporters after a meeting with the delegation, led by US Assistant Trade Representative Brendan Lynch, at the Secretariat on Sunday. Lynch is the US official responsible for trade policy in South and Central Asia.

The delegation is in Dhaka on a three-day visit to finalise a trade agreement between the two countries.

National Security Adviser Khalilur Rahman, Commerce Secretary Mahbubur Rahman, National Skills Development Authority Chairperson Nazneen Kawshar Chowdhury, and other officials attended the meeting.

According to the Commerce Ministry sources, the US team will also meet the Chief Adviser and Power and Energy Adviser Muhammad Fouzul Kabir Khan.

After Bangladesh initiated steps to increase imports from the US, the reciprocal tariff was set at 20 per cent, effective from 7 August. Previously, Bangladeshi goods entered the US at an average tariff of 15 per cent. With the new reciprocal tariff, the total effective tariff now stands at 35 per cent.

Speaking to journalists, the commerce adviser said: “This US delegation has come to Dhaka as a follow-up to our visit to the US, where we sought a reduction in the reciprocal tariff rate. They came to review the progress on the products we had promised to import from the US. We presented updates, and they are satisfied.”

Currently, the trade deficit between Bangladesh and the US is around USD 6 billion. If the deficit narrows, the reciprocal tariff could be brought down to 20 per cent.

To reduce the imbalance, Bangladesh plans to increase imports of agricultural and energy products from the US, in addition to aircraft. These include cotton, liquefied natural gas (LNG), soybean seeds, and wheat. Officials said good progress has already been made in sourcing these items.

Although the reciprocal tariffs took effect on 7 August, no agreement has yet been reached. Bangladesh is pushing for a deal that would reduce the tariff to at least 15 per cent. A draft agreement is being prepared, and if both sides agree, a deal could be signed by the end of this month. The visiting delegation is expected to return home and confirm the timeline.

The commerce adviser noted that the trade deficit with the US is already improving. “The economic capacity of both our sides is increasing. The products we are importing to help balance trade are being purchased at affordable prices,” he said.

Sheikh Bashiruddin added that the ready-made garment sector, which depends heavily on US cotton, has been under pressure from higher tariffs. “This was one of the main goals of today’s meeting. If the trade deficit is reduced as promised, there is a possibility of lowering tariffs on Bangladesh’s exports,” he said.

Illustrating the reduction in the trade gap, Commerce Secretary Mahbubur Rahman said Bangladesh imported USD 600 million worth of cotton in the last fiscal year, while USD 276 million worth has already been imported in just two months of the current fiscal year. Wheat purchases have also been made.

When asked whether Bangladesh is paying more for wheat from the US compared to Russia, the commerce adviser replied that US wheat is of higher quality, containing 10–15 per cent more protein than Russian wheat.

Asked about Boeing aircraft purchases, the commerce adviser said: “Aircraft supply is a long-term issue. It is not a matter of ordering today and receiving delivery next year. But it will help reduce the trade deficit in the long run.”

Salim Raihan, Executive Director of the South Asian Network on Economic Modeling (SANEM), told Prothom Alo that the reciprocal tariff imposed under the Trump administration is unlikely to be sustainable in the long run. “This issue must be kept in mind during negotiations. We must also observe what other countries are doing. It is good to reduce tariffs, but we also need to consider what concessions Bangladesh will have to make in return,” he said.