Under the new plan, a minimum 10 percent tariff will apply to all US imports, while steeper, country-specific "reciprocal" tariffs will target around 60 nations, including Bangladesh. Previously, Bangladeshi goods entered the US market with an average duty of 15.62 percent.The newly imposed 37 percent tariff places Bangladesh among the higher-penalised countries under the policy, just behind Cambodia (49 percent) and Sri Lanka (44 percent).
The European Union will see a 20 percent levy. Vietnam, another key player in the global trade landscape, will bear a 46 percent tariff on its exports to the US.Pakistan will face a 29 percent tariff under the policy, reflecting what the administration says is a 58 percent trade barrier against U.S. products. The US has imposed a 26 percent reciprocal tariff on Indian goods, citing a 52 percent barrier on American exports to India.
China, the primary focus of Trump's trade agenda, will face a 34 percent reciprocal tariff, which stacks atop an existing 20 percent fentanyl-related duty and separate levies on categories like solar panels. That brings the effective tariff rate on many Chinese goods to well above 50 percent. Analysts at Bloomberg Economics warn this could result in up to a 90 percent decline in Chinese exports to the US by 2030.
The US accounts for 17-18 percent of Bangladesh's total global exports. The United States has historically been a top export destination for Bangladeshi garments, and such a steep tariff could dramatically reduce competitiveness. Bangladesh's garment sector in the critical employment source. The announcement is likely to have a major impact on Bangladesh as USA is the single largest market of RMG and RMG is the single major product of export basket. The new tariff will drag down demand for Bangladeshi products.
The European Union will see a 20 percent levy. Vietnam, another key
player in the global trade landscape, will bear a 46 percent tariff on
its exports to the US.Pakistan will face a 29 percent tariff under the
policy, reflecting what the administration says is a 58 percent trade
barrier against U.S. products. The US has imposed a 26 percent
reciprocal tariff on Indian goods, citing a 52 percent barrier on
American exports to India.
Bangladesh can overcome the possible impact with prompt action of correction of the tariff policy. According to a chart published by the White House today, the US government claims Bangladesh effectively imposes a 74 percent tariff on American goods. In response, a 37 percent "discounted reciprocal tariff" will now be levied on Bangladeshi products entering the US market.
Markets are already in panic mode. The new tariff policy has already impacted global economy. US stocks has erased nearly $5 trillion of value since mid-February.The Aston University Business School estimates that global trade disruptions and rising costs could erase $1.4 trillion from the world economy.On the eve of Trump's tariff announcement, major clothing retailers, including H&M, expressed concern. H&M CEO Daniel Erver noted that the tariffs will likely lead to increased prices for American consumers, signaling potential knock-on effects even within the US market.The global recession particularly, US economic recession will reduce demand of RMG in the global market over and above the new tariffs.
Gold has skyrocketed to $3,100 per ounce - its best quarter in nearly 40 years as central banks are willing to boost gold reserves. Because right now, trust in the system is crumbling. If Trump goes all in, a full-scale retaliation is expected. Uncertainty will spike.Goldman Sachs pegs the odds of a US recession at 35% and JPMorgan predicted recession at 40%.
There is a partial good news that USA has imposed tariff on the competitors like Vietnam, India and China etc in RMG sector. The impact will increase price of RMG exported from other countries to give asmall leverage for Bangladesh.
Bangladesh must respond strategically as she has no command over mutual trade relationship to counter with new tax. Bangladesh may prepare to reduce the tariff on US products imported to Bangladesh and then start negotiation with USA to bring down their tariff on Bangladesh products. There is no alternativewithout a specificaction by way of SRO from NBR to reduce the tariff on products imported from USA.
Bangladesh is unwilling to reduce the general import tariff to face the challenge of LDC graduation. A reduction of tariff willalso support Bangladesh to prepare for the graduation as well.
