No reason to fear US tariffs: Debapriya

Distinguished fellow of the Centre for Policy Dialogue (CPD), Debapriya Bhattacharya, has said there is no reason to be fearful of US reciprocal tariffs. “I say this with full responsibility, the impact of these tariffs is also being felt by our competitors. As a result, we are not losing significantly in comparative competition.”

He made the remarks while presenting the keynote at a seminar titled "US reciprocal tariffs and way forward for Bangladesh,” held at the Dhaka Chamber of Commerce and Industry (DCCI) office in Motijheel on Saturday. The event was jointly hosted by DCCI and Business Initiative Leading Development (BUILD).

Debapriya termed the US reciprocal tariffs a form of “toxic tariff treatment” and said political motives outweigh economic rationale in the move by the new US administration. He also expressed doubt about the effectiveness of Donald Trump’s tariff policy. He doesn’t believe the objectives behind the policy will be achieved, as the market will not respond positively.

He pointed out that the policy used to impose reciprocal tariffs is not completely right from the economic point of view. They are imposing tariffs as per trade deficits with the respective countries. But the growth of the service sector is much higher in current reality. It means they did not consider the entire trade.

Besides, the existing trade deficit may not sustain in the next year, he said, adding that if the US revises the tariff every year, there will be no stability required for investment.

The economist further said if a policy lacks economic rationality, it becomes difficult to ensure its sustainability, as the market does not accept it. He, however, emphasised that the crisis could be the moment to implement long-discussed economic reforms.

Attending the discussion as the chief guest, commerce secretary Mahbubur Rahman said in response to US tariffs, Bangladesh is prioritising bilateral over multilateral discussions. “So far, it seems Bangladesh is on the right track. Therefore, the agenda has not been submitted formally to the World Trade Organization (WTO).”

He also noted that negotiations are underway with the US for about 100 products. “Besides, we will discuss incorporating the imports of US products from third-countries into total trade calculations. We will not accept a situation where we purchase their products, but those are not included in the trade data.”

He further said if the US disagrees, the government will amend the import policy and ban imports from third countries. This system is already applied in the automobile sector. Besides, the authorities are taking some more steps, including withdrawal of radioactivity testing requirements.

International Chamber of Commerce (ICC) Bangladesh president Mahbubur Rahman and Bangladesh Trade and Tariff Commission chairman Mainul Khan were special guests at the seminar.