US tariff negotiation: Govt turns to the businessmen at the eleventh hour

From the very beginning, the interim government did not involve the private sector, economists, or trade experts in the negotiations over reducing reciprocal tariffs imposed by the US.

As a result, exporters are not very confident about any progress regarding tariff reduction. They said that if the tariffs are not reduced, it is they who will ultimately suffer. Some US buyers have reportedly informed Bangladeshi exporters that the country is lagging far behind in the negotiations, which has created frustration among exporters over the government’s handling of the issue.

According to concerned businesspeople and exporters, after two and a half months of talks, it is now evident that competing countries are far ahead of Bangladesh. Yet, Bangladesh has only ten days left to negotiate a reduction in reciprocal tariffs. After failing to bring any positive results in two rounds of talks, the government is now approaching exporters, businesses, and the private sector.

It has been learned that the Ministry of Commerce is leading the negotiation with the Office of the US Trade Representative (USTR) on behalf of the Bangladesh government. After two meetings, the government has come to understand that USTR does not have the authority to reduce tariffs — only the Trump administration can do so.

Therefore, late last week, the government’s top level informally requested the private sector to do whatever is possible to convince the Trump administration, including hiring lobbyists. Business leaders had been urging the government to involve the private sector since April. They had even advised hiring lobbyists back then.

However, the government did not heed these suggestions. Instead, several top government officials had assured businesspeople that they could resolve the issue themselves and that there was no reason for concern.

Moreover, citing a non-disclosure agreement (NDA) signed with the US on 12 June, the government has not disclosed what was discussed, agreed upon, or disputed in the negotiations. Business leaders allege they were kept in the dark for a long time regarding the negotiations.

A top businessperson, requesting anonymity, said that last Saturday, Trade Adviser Sheikh Bashir Uddin advised the private sector to hire lobbyists and initiate talks with the Trump administration.

Despite two rounds of talks, no progress has been made in reducing the 35 per cent reciprocal tariff imposed on Bangladeshi products by the US In a letter dated 8 July, US President Donald Trump informed Chief Adviser Professor Muhammad Yunus that a new tariff rate would take effect from 1 August. If enforced, the average tariff on Bangladeshi exports to the US would rise to 50 per cent.

There are only ten days left before the new tariffs come into effect. A team led by Trade Adviser Sheikh Bashir Uddin is scheduled to visit the US for another round of talks. However, as of Sunday, the US had not provided any specific date for the discussion.

The United States is Bangladesh’s single largest export market. In the 2024–25 fiscal year, Bangladesh exported goods worth USD 8.69 billion to the US, accounting for just over 18 per cent of total national export earnings. Over 85 per cent of these exports were garment products, followed by caps, leather shoes, home textiles, wigs, and more.

At a roundtable organised by Prothom Alo yesterday, AK Azad, managing director of Ha-Meem Group, a leading garment exporter, said, “In my 40 years in the export business, I have never seen such a crisis. One of my major buyers told me that our negotiating position is weak. So, we cannot expect a favourable outcome.”

On 2 April, US President Donald Trump imposed reciprocal  or reciprocal tariffs on imports from several countries. Tariffs were increased on products from 57 countries, with a 37 per cent additional tariff on Bangladeshi goods. On 9 April, Trump suspended these reciprocal tariffs for three months, although a minimum 10 per cent tariff remained in place on all countries.

Bangladesh delayed starting formal negotiations with the US over tariff reductions. The government also took time to consult relevant stakeholders such as trade researchers, exporters, and business leaders. Initially, the Ministry of Commerce was expected to lead the negotiations. However, individuals who could not take the discussions to a meaningful stage were instead involved early on.

The negotiations initially were led by chief adviser’s special envoy for international affairs, Lutfey Siddiqi, followed by National Security Adviser Khalilur Rahman. At a briefing on 5 April, Khalilur Rahman said, “This didn’t come out of the blue. We are prepared for it. We will take steps soon in consultation with the US administration.”

At the same briefing, Trade Adviser Sheikh Bashir Uddin said, “Given the structure of our industry and the maturity of our products, I think a door of great opportunity could open for Bangladesh.”

Following a meeting with USTR on 26 June, the national security adviser reported to the government that Bangladesh was ahead of other countries in the negotiations at that point.

From 9 to 11 July, another round of talks took place in Washington between Bangladesh and USTR. This time, the delegation was led by Trade Adviser Sheikh Bashir Uddin. After three days of discussions, the team returned without delivering any positive news. Citing the NDA, Bashir Uddin told the private sector that he could not disclose details of the talks.

Before the second round of talks with Bangladesh, the US on 8 July announced new tariff rates for 14 countries, including South Korea and Japan. Later, seven more countries were added to the list. After this, Bangladeshi exporters and business leaders attempted to meet with the chief adviser but failed.

Instead, they met with a four-member advisory committee. At that meeting, they informed the advisors that business leaders and experts had not been included in the tariff talks concerning this major export market, which had led to growing concerns among exporters.

Several business leaders noted that the US discussions are not limited to trade. The US wants to engage Bangladesh in broader geopolitical strategies, aiming to prevent it from leaning too far toward China. One of the conditions includes compliance with US sanctions imposed on other countries. Another stipulation reportedly requires that Bangladesh cannot offer the same tariff-free access to US goods that it might offer to other nations.

At Prothom Alo’s roundtable yesterday, Ananta Group Managing Director Sharif Zahir said, “We have failed diplomatically in the negotiations to reduce US reciprocal tariffs. However, we still have ten days. We should use every possible communication channel our head of government has with the US to make a final attempt.”

He added, “If the reciprocal tariffs are not reduced, our business will not survive more than six months. Over a million people will lose their jobs.”

Meanwhile, after getting the green light from the government, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has started efforts to hire lobbyists. Last Saturday, BGMEA contacted two US firms — CGCN Group and Ballard Partners. One of the firms has already responded. BGMEA has also officially started involving the Policy Research Institute (PRI), a Bangladeshi think tank, in the negotiation process.

When contacted, BGMEA President Mahmud Hasan Khan told Prothom Alo yesterday, “Two days ago, we were informally asked by the top level of the government to hire lobbyists. So we started working. Last Saturday, we contacted two lobbying firms. But because this is a late move, finding a good lobbyist is proving difficult, as many are already working for other countries.”

Asked further, Mahmud Hasan Khan said, “We have only about ten days. It’s extremely difficult to hire lobbyists and achieve any positive outcome in such a short time. But we are trying nonetheless.”