THE reciprocal tariff that the United States has finally, after three rounds of negotiations in July, imposed on goods import from Bangladesh at 20 per cent, lowered from 35 per cent that the United States on July 8 announced, is viewed as something that has brought about short-term relief. The tariff came into effect on August 1, making Bangladeshi exporters pay a 20 per cent reciprocal tariff in addition to, on an average, a 15 per cent regular tariff on export to the United States. The US president first on April 2 announced a 37 per cent tariff on goods import from Bangladesh but put it on hold on April 9 for three months. With the deadline ending on July 9, the United States sent a letter on July 8 setting the 35 per cent tariff, giving Bangladesh, along with other countries, until July 31 to reach trade negotiations. Whilst the government has described the reduction in the reciprocal tariff to 20 per cent as a 鈥榣andmark鈥� trade deal, given the positive image of the chief adviser to the interim government, Muhammad Yunus, the rate of the reciprocal tariff should be much less.
Economists, on the other front, say that although it would give a short-term relief, what is important to know to evaluate the event is what Bangladesh may have offered to the United States in return. What Dhaka has offered Washington but for the purchase of aircraft and wheat remains unknown. Bangladesh exported goods worth about $8.4 billion, $7.37 billion of which accounts for apparel, in 2024 and Bangladesh imported goods worth $2.2 billion from the United States that year. The United States, against this backdrop, has asked Bangladesh to lower trade deficit for a 鈥榝avourable鈥� tariff rate. Dhaka on July 27 planned to buy 25 Boeing aircraft and on July 20 signed a memorandum to import 700,000 tonnes of wheat a year for the next five years to narrow the trade deficit with the United States. Dhaka on July 23 also decided to buy 220,000 tonnes of wheat from the United States for $302.75 a tonne. Economists, therefore, say that the gains should be evaluated in the light of what has been offered. Businesses say that the tariff rate for Bangladesh, which is equal to or slightly lower or higher than the tariff imposed on close competitors of Bangladeshi goods, has provided an overall relief, but the tariff may reduce the demand for Bangladeshi goods on the US market as it would add to retail prices of goods. The situation still calls for the diversification of export products and markets.
The interim government should, therefore, realise that the gains from the reduction in US reciprocal tariff can only be evaluated in the light of what has been offered in exchange.