THE July 7, 2025, letter from President Donald J Trump to Dr Muhammad Yunus, the chief advisor to the government of Bangladesh, reads like a familiar echo of an old, misguided economic playbook. In it, the US warns of a 35 per cent tariff on all Bangladeshi goods entering American markets, citing long-standing trade deficits and the need for reciprocal trade policy. While the language is clothed in the rhetoric of fairness and national security, the policy direction is economically flawed, morally questionable and strategically counterproductive. It鈥檚 true that America鈥檚 trade relationships deserve continual review. However, targeting one of the world鈥檚 poorest yet most promising economies with harsh tariffs under the guise of economic patriotism is a strategic misstep that weakens 鈥� not strengthens 鈥� America鈥檚 global standing.
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Tariffs on the poor are a tax on hope
TARIFFS are collected from US importers, not foreign exporters. A 35 per cent tariff on Bangladeshi textiles will raise prices for American consumers and reduce demand. To stay competitive, Bangladeshi producers will likely lower prices, absorbing part of the cost. This erodes profits, shrinks export earnings and harms employment and GDP in Bangladesh 鈥� one reason so many nations fear rising tariffs.
The Bangladeshi garment industry employs hundreds of thousands of women, empowering them economically and socially. This sector is not merely a trade statistic 鈥� it鈥檚 a path to dignity and progress.
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Trade deficits are not a national emergency
THE letter frames Bangladesh鈥檚 trade surplus with the US as a threat to American economic and national security. This is a fundamental misreading of how trade works. A trade deficit simply means that Americans are buying more from Bangladesh than vice versa. Why? Because Bangladesh offers goods at prices American consumers and companies find attractive. That is not a crime 鈥� it鈥檚 capitalism.
Moreover, the obsession with bilateral trade balances ignores the larger multilateral picture. The US runs deficits with some countries and surpluses with others. As long as the dollar remains the world鈥檚 reserve currency and global demand for US assets remains high, trade deficits are sustainable and even beneficial.
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Tariffs won鈥檛 boost us GDP, but hurt American consumers
THE Trump administration seems to think that squeezing trade partners will somehow revitalise American manufacturing and raise GDP. But protectionism in the modern economy is like putting a firewall around your house in the middle of a city, it isolates rather than protects.
Bangladesh isn鈥檛 taking away American jobs; automation and domestic policy failures are. Forcing American consumers to pay more for the same goods will only create inflationary pressures without generating comparable economic growth. Even if a few textile jobs return to the US, they won鈥檛 be the same scale or cost structure, and they will come at the expense of higher prices and lower real wages for everyone else.
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Strategic myopia: undermining long-term geopolitical influence
MORE alarming than economics is geopolitics. America鈥檚 strength doesn鈥檛 lie only in its economy or its military 鈥� it lies in its ability to inspire, support and lead. In an increasingly multipolar world, where China is actively building influence across Asia and Africa through trade, infrastructure and diplomatic engagement, America cannot afford to alienate its friends.
Bangladesh is a strategic partner in South Asia, a growing democracy and a Muslim-majority country that has shown resilience, pragmatism and alignment with western values. Punishing it with tariffs pushes it towards alternative partners like China and Russia, who are more than happy to fill the vacuum with soft loans, infrastructure projects and a more respectful tone.
Trade is not just about goods; it鈥檚 about goodwill. It is a form of soft power that builds alliances, shapes preferences and fosters dependency on American norms and institutions. When America shuts its doors with tariffs, others step in.
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Open markets as a tool for 鈥攁nd American influence
INSTEAD of squeezing poorer nations, the United States should pursue the opposite strategy: radically open its markets to underdeveloped and developing countries with low or zero tariffs, coupled with technical assistance and regulatory cooperation. The logic is simple but powerful.
When Bangladesh increases its per capita GDP through trade-led growth, it creates a rising middle class that will demand more American goods 鈥� technology, education, entertainment, pharmaceuticals, even agricultural products. Today鈥檚 exporter of low-cost textiles is tomorrow鈥檚 importer of high-value American products and services. This is not charity. It is enlightened self-interest.
Historical precedent supports this approach. Post-war Japan, devastated by conflict and resource scarcity, rapidly became a high-income country through sustained American support 鈥� military, economic and trade. The US provided capital, security, and most importantly, access to American markets. In return, Japan became not only an economic powerhouse but also a top consumer of US technology, aircraft, software and luxury goods.
South Korea followed a similar trajectory. Starting from near-total destruction in the 1950s, it grew into one of the world鈥檚 most dynamic economies with US assistance and favourable trade terms. Today, South Korea is a vital US ally and a key buyer of everything from Boeing aircraft to Hollywood entertainment to Silicon Valley chips. The same pattern played out in parts of Western Europe under the Marshall Plan and in Taiwan through US-supported land reforms and trade policies. These were not acts of charity; they were investments in future partnerships. Bangladesh, with its youthful population and growing industrial capacity, has the potential to follow in those footsteps 鈥� if the United States allows it to.
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The macroeconomic convergence hypothesis听听听
THE macroeconomic convergence hypothesis holds that poorer countries tend to grow faster than richer ones, gradually narrowing gaps in income and productivity. This convergence is driven by trade, investment and technology transfer.
If the US truly believes in market economics, it should see Bangladesh鈥檚 rise not as a threat but as a validation of the capitalist system it promotes. Supporting countries like Bangladesh fosters long-term convergence 鈥� not only in wealth, but also in institutional maturity, consumer growth and geopolitical alignment.
A stronger Bangladesh will contribute to global prosperity, climate action and regional stability 鈥� while becoming an important market and partner for American goods. Protectionist policies disrupt this process and send countries looking elsewhere for opportunity, often towards strategic rivals. In doing so, the US risks ceding both moral authority and economic leadership. As the convergence hypothesis shows, the greatest returns 鈥� economic and diplomatic 鈥� come from engaging rising economies, not penalising them.
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A missed opportunity in the letter鈥檚 tone and message
Beyond the substance, the tone of the letter to Dr Yunus 鈥� a Nobel Peace Prize laureate and global symbol of poverty alleviation through innovation 鈥� is disturbingly transactional. It reduces decades of bilateral cooperation to a scorecard of tariffs and deficits, ignoring the broader developmental, humanitarian and geopolitical context.
It also ignores the glaring hypocrisy of demanding open markets abroad while closing American markets at home. The letter suggests that if Bangladesh drops its trade barriers, then perhaps America will lower its tariffs. This is the language of coercion, not cooperation.
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What would it look like if America took a different approach?
IMAGINE a letter that said: 鈥淲e admire Bangladesh鈥檚 progress and welcome its rise. We believe that free and fair trade can enrich both our people. Therefore, we are dropping all tariffs on Bangladeshi goods immediately and unilaterally. We invite you to do the same 鈥� not because we demand it, but because we believe it is the right path forward. Such a letter would do more for America鈥檚 GDP and global leadership than any 35 per cent tariff ever could.
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Greatness through generosity
BANGLADESH is at a pivotal moment. After decades of authoritarian drift, the nation shows signs of democratic renewal. Its first republic 鈥� defined by military coups, one-party rule and dynastic control 鈥� may finally be giving way to a second republic grounded in accountability, pluralism and inclusive growth.
Under civic leaders like Dr Yunus, Bangladesh has a chance to chart a new course. The US 鈥� which failed to support Bangladesh in its 1971 war of independence 鈥� now faces a second chance to stand on the right side of history.
If Washington truly wants to compete with China鈥檚 Belt and Road, it must offer not just deals, but dignity. Trade policy should not be a cudgel 鈥� it should be a bridge.
Tariffs may seem tough, but greatness lies in generosity. Leadership is not measured by how high we build our walls 鈥� but by how many hands we extend.
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Dr Abdullah A Dewan is a former physicist and nuclear engineer at the BAEC and professor emeritus of economics at Eastern Michigan University, USA.
