Reciprocal tariffs: Trade deal with US likely this month

Despite the announcement of a 20 per cent reciprocal tariff on Bangladeshi exports to the United States, no formal agreement has yet been signed between the two countries.

A deal may take another two to three weeks, according to sources at Bangladesh’s Ministry of Commerce and the Bangladeshi embassy in Washington.

The Office of the United States Trade Representative (USTR) is currently drafting the agreement. Once completed, it will be sent to the Ministry of Commerce in Dhaka for review and feedback, after which a signing date will be finalised in Washington.

The 20 per cent reciprocal tariff, announced under the Donald Trump administration, is scheduled to take effect on 7 August. A joint statement from both governments is expected soon.

Commerce Adviser Sheikh Bashir Uddin, speaking to Press Minister Golam Mortoza at the Bangladeshi embassy in Washington on Friday night, said there is no room for complacency over the 20 per cent tariff. “Its success or failure will depend on Bangladesh’s trade capacity,” he noted.

Even before talks began on reducing the tariff rate, the Commerce Ministry signed a non-disclosure agreement (NDA) with the US in mid-June. Sheikh Bashir Uddin acknowledged that some details of the agreement were prematurely leaked, but emphasised that nothing in it goes against national interests. “Through dialogue, we have navigated past any contentious issues,” he said, adding that the full text may be released with US consent.

Defending the NDA, he explained that confidentiality clauses are standard practice, even in local contracts between private firms or financial institutions. Until a deal is finalised, confidentiality must be maintained. Since the US has linked the agreement to its national security concerns, secrecy is inevitable, he added.

He stressed that any trade agreement that undermines Bangladesh’s long-term capabilities would be counterproductive. There’s no benefit in signing a deal that harms our trade competitiveness or affects our small economy.

On the issue of Bangladesh purchasing 25 aircraft from Boeing, the adviser said it had not come up in negotiations. Boeing only manufactured 12 aircraft last year, and under the current agreement, delivery may not begin before 2037.

Without improving Biman Bangladesh Airlines’ operational efficiency, buying new planes would yield little benefit, he said. The interim government has been making effort.

The interim government is working to improve that efficiency. Currently, Biman has the capacity to serve an additional 10 million passengers annually, so acquiring 25 aircraft is not excessive in that context.

The advisor stated that the US has shown more interest in agricultural products. Bangladesh imports food items worth $15 to $20 billion annually, and the US is one of the world’s largest agricultural producers.

According to Bashir Uddin, Bangladesh has proposed reducing its trade deficit with the US by increasing imports of agricultural and energy products. These are items Bangladesh already needs to import. The current trade deficit with the US stands at around USD 6 billion, and by increasing imports of cotton, soybeans, corn, and wheat, the government hopes to reduce the deficit by about USD 2 billion.

Speaking to Prothom Alo on Saturday night, US embassy press minister Golam Mortoza confirmed that the drafting of the trade agreement is in progress and is expected to be finalised within this month.

After the NDA was signed in June, the US sent a list of conditions to Bangladesh for the trade deal. According to Commerce Ministry sources, these include tariff and non-tariff issues, digital trade and technology, rules of origin, national security, and trade-related provisions.

One of the key points is a reduction in imports from China. The US also wants its products to have unrestricted access to the Bangladeshi market and for Bangladesh to unconditionally accept US quality and safety standards.

Further conditions include increasing imports of US military equipment instead of Chinese, as well as boosting imports of civilian aircraft and related components, crude oil and edible oil, and entering into long-term contracts for liquefied natural gas (LNG). Bangladesh is also being asked to increase wheat imports and notify the World Trade Organisation (WTO) after signing the agreement.

Sources also indicate that the US wants easier market access for its vehicles in Bangladesh and expects that no additional testing or inspections be required for importing American vehicles and auto parts.

It has also demanded that Bangladesh ensure full labour rights in Export Processing Zones (EPZs), and drop all legal cases against garment workers and union leaders involved in previous protests for fair wages and rights.

Meanwhile, on 16 July, the National Board of Revenue (NBR) temporarily suspended its Second Secretary and Deputy Commissioner Mukitul Hasan for allegedly leaking portions of the US conditions prior to the agreement. An official order from the NBR stated that Hasan violated service discipline by disclosing highly confidential state documents, and that a departmental inquiry has been launched against him.