Trump’s reciprocal tariff: Unwarranted setback for Bangladesh

The reciprocal tariff that the US president Donald Trump has declared on exports to the US market from various countries around the world, is like a tsunami for the global economy. There has been nothing like this in the last 100 years.

Imposition of such a tariff on Bangladesh, an LDC within the WTO framework, was unwarranted, but this has been done. This imposition is a completely unwarranted setback for us.

Initially it seems, the tariff rate has been set taking into consideration the trade deficit based on the volume of imports and exports between Bangladesh and the US. We import various services, including technological, banking and insurance from the US, which was not taken into account. If the import of services had been taken into account, such a huge reciprocal tariff on Bangladeshi goods would not have been imposed.

The whole issue is still not clear to us. Many things are unclear as of now. That is why we have been trying to understand the pros and cons of the issue. Then we will start taking due measures.

Donald Trump announced the reciprocal tax in Washington DC on Wednesday afternoon local time. Immediately after learning the reciprocal tariff, I had a three-hour meeting with the commerce secretary, National Board of Revenue (NBR) chairman and Export Promotion Bureau (EPB) vice-chairman on Thursday and tried to discern the details.

We also talked to the Bangladesh ambassador in the US. We are trying to decipher the explanations to this end. The finance adviser has called a meeting with all the stakeholders on Sunday. We shall discuss a plan of action there.

But I think this is more of a global problem than a bilateral one. This is like a tsunami for the global economy. That is why we have been keeping a close eye on what the steps the larger economics are taking or the reactions they have been showing. There are doubts as to how far the issue could be solved through bilateral or multilateral initiatives. The government will take steps if this could be resolved through any kind of bilateral initiatives.

Our primary goal is to take all the necessary steps to bring down the tariff rate on exports from Bangladesh as much as possible. If necessary, we will amend our policy to increase import of goods from the US to avail some benefit. However, there is very little scope of taking such steps under the WTO framework.

I have been looking into all aspects of the matter since the announcement of reciprocal tariff rate by Donald Trump. We are closely observing the reactions from around the globe. Maybe it will take one or two weeks to have a holistic understanding of the matter. Then we can fix what the government should do.

As commerce adviser I can say this much, the government will take all the necessary steps so that our exports do not get a hit.

We import goods worth US $2 billion from the US and export goods of US $7 billion to US$ 8 billion there. Bangladesh is in a relatively better position in this bilateral trade. If necessary we will increase imports from the US if that helps relax the tariff pressure. We have been maintaining communication with the US embassy to this end.