The enduring strife concerning international commerce between China and the United States has become not only a bilateral problem but a point of global economic concern. It carries significant repercussions for the international middle-class households. A study conducted in 2024 by the esteemed Peterson Institute for International Economics suggests that the tariffs proposed by the former American President Donald Trump may cost an average middle-income U.S. family no less than $1,700 annually. Furthermore, if one takes into account the possible repercussions due to retaliatory steps and the overall effect on the economy, this amount might potentially end up being twice as high as initially proposed.
The introduction of the Reciprocal Tariff (RT) policy by the US has added another layer of complexity to an already intricate international trade environment. This strategy proposes a uniform 10% tariff on all imported goods, regardless of the standing trade agreements, while accommodating some exceptions for nations that grant considerable trade concessions. However, it’s worth noting that the temporary suspension of the RT for a period of 90 days, although initially seen as a reprieve, merely accentuated the ambiguities surrounding international trading partnerships.
In reaction to these shifting trade dynamics, Bangladesh has proactively initiated measures to counteract the negative economic impacts, with a particular focus on its critical ready-made garment (RMG) sector. This sector plays a pivotal role in the country’s economy, contributing to up to 80% of the national export revenues. To offset the disadvantages, Bangladesh has committed to greater imports from the U.S., including commodities like cotton, wheat, corn, soybeans, and liquified natural gas (LNG).
In line with the proactive measures, Bangladesh appears to be set on becoming the world’s leading cotton importer during the year 2024-25 with American cotton accounting for a significant proportion of these imports. There have even been suggestions to reduce tariffs on major U.S. exports like gas turbines, semiconductors, and medical equipment by half. Concurrently, efforts are in full swing to eradicate non-tariff roadblocks such as overcomplicated customs procedures, tough packaging and labeling laws, and other related trade facilitation obstacles.
A significant positive step taken by Bangladesh in this direction is the establishment of bonded warehouse facilities for imports of U.S. cotton. This move is expected to expedite the delivery schedules and lower the costs involved, thereby making it more beneficial for both trading partners.
The trade deficit that exists between Bangladesh and the U.S., demonstrated by $8.4 billion in exports contrasted against merely $2.2 billion in imports in the year 2024, has been the highlight in the discussions concerning bilateral trade. In an effort to redress this imbalance, Bangladesh has offered to decrease or completely remove tariffs on more than a hundred different U.S. goods, including agricultural yield and scrap metals. This is anticipated to culminate into a balanced and fair trade relationship with the potential for reductions in the U.S. imposed tariffs on goods exported from Bangladesh.
However, it isn’t all smooth sailing, as outlined by the 2025 National Trade Estimate Report published by the U.S. Trade Representative’s (USTR). Despite Bangladesh’s drive to improve trade relations, numerous issues continue to linger. Predominantly high tariffs, severe obstacles to potential investments, and longstanding corruption issues serve as impediments to American businesses attempting to establish or grow their operations within Bangladesh.
The USTR report outlines further complications such as convoluted customs procedures, a lack of clarity in regulations governing imports and exports, and pervasive delays in notifying the WTO of these changes. Rigid equity caps in sectors such as oil, gas, and telecommunications – along with the challenging acquisition of ‘no-objection certificates’ – also pose significant investment hurdles for foreign entities.
U.S. firms have reported considerable time delays, often exceeding one year, in profit repatriation owing to administrative obstacles. Rampant corruption, lack of governmental transparency in the procurement process, and ineffective execution of anti-corruption legislation make matters worse.
The report further underlines lax enforcement of Intellectual Property Rights (IPR), a deep-seated presence of counterfeit goods, and limited capacity for investigation as factors hampering the protection of intellectual property. Governmental regulations allowing access to digital communications, coupled with data localization requirements, introduce further challenges to the digital commerce sector. Bangladesh also faces suspension from the U.S. Generalised System of Preferences (GSP) due to failing to meet international labor standards. The U.S. has suggested an 11-point Labor Action Plan to address these issues.
The current global trade imbroglio calls for a mindful, strategic, and insightful response from all parties involved, and Bangladesh is no exception. Since the U.S. is a significant import target for Bangladesh, they must navigatethrough international trade complexities wisely.
In light of these evolving circumstances, Bangladesh could benefit greatly by keeping an eye on other nations’ trade agreements and accordingly adjusting national strategies to meet international standards. By doing so, Bangladesh will not only boost its own competitiveness but also potentially foster healthier, more stable trade relations across the international platform.
In conclusion, it is clear that the evolving situation calls for innovative responses from all parties involved in international trade. As countries such as Bangladesh approach this challenge with proactive measures, they create opportunities not just for themselves but for the global economy itself. Their budding strategies, like importing more goods from the US, reducing tariffs, establishing bonded warehouse facilities, and preparing to address highlighted issues by USTR, pave the way for a future where trade relations can continue to grow and strengthen in a complex international landscape.
The post Navigating Trade Disputes: Bangladesh’s Road to Economic Resilience appeared first on Real News Now.
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