The Trump administration has described it as part of the ‘Reciperook Tariff’ policy, citing alleged 74% tariffs on American goods in Bangladesh, which aims to reduce the US trade deficit. This step is considered a shock for Bangladesh’s economy, especially its readymade garment (RMG) sector, already struggling with domestic instability and global business challenges.
After all, why Bangladesh on the target of Trump?
In Trump’s eyes, this entire partnership is against America’s interests, and now Bangladesh will have to pay its price.
What will be the effect of 35% tariff?
According to Trump’s order, from August 1, 35% import duty will be imposed on all goods coming from Bangladesh to America. About 85% of Bangladesh’s economy depends on the export of textile and readymade garments, with the US one of the largest customers. IMF and World Bank statistics say that in 2023, Bangladesh exported more than $ 10 billion to the US. In such a situation, as soon as 35% of tariffs are taken, these products will lag behind in price competition in the US market, which will reduce orders, shutdown factories and workers will be unemployed.
Deep crisis on Bangladesh’s economy
The basis of the economy of Bangladesh is its garment sector, which is part of the country’s 80% export income and 10% GDP. This sector employs more than 40 lakh people, especially women,. The US is the largest single export market in Bangladesh, where garments and generic drugs worth $ 8.4 billion are exported every year. The total tariff from the new 35% tariff with a pre -existing 15% tariff has reached close to 50%, which will increase the price of Bangladeshi products in the US market rapidly.
This crisis is not only economic but also social. There are 60% of women working in the garment sector, whose employment has promoted social changes like women empowerment, education and late marriage in Bangladesh. Thousands of women can be unemployed due to this shock of tariff, which will put heavy pressure on the family -dependent families in rural areas. With this, social issues like leaving school and marriage at a young age can emerge again.
The US exports agricultural products like wheat, soybean, maize and cotton to Bangladesh. If Bangladesh imposes counter -tariffs due to the tariff war, the prices of American agricultural products may increase, which will cause damage to the local farmers. At the same time, if Bangladesh increases American agricultural imports, local farmers will have to compete with cheap, subsidized American products, which may put their livelihood in danger.
Price of ‘Pangal’ with China?
The Trump administration justified tariffs on Bangladesh, claiming that Bangladesh impose tariffs and non-tariff barriers on American goods. However, Bangladesh experts have questioned this figure, claiming that it is based on the calculation of the Trump administration’s trade deficit, not at the actual tariff rates. Muhammad Yunus, the head of the interim government of Bangladesh and the Nobel Prize winner Muhammad Yunus, had written a letter to Trump demanding a three -month ban on 35% tariff, which mentioned efforts to increase American imports. But Trump rejected this request, confirming 35% tariff, which is earlier declared 37% to 2% less.
The recent political instability of Bangladesh and the resignation of former Prime Minister Sheikh Hasina was expected to improve relations with the US under the interim government. But this step of Trump indicates that he is giving priority to business interests more than regional politics or diplomatic goodwill. Some analysts believe that Bangladesh’s growing proximity with China, especially in Belt and Road Initiative, may have passed the Trump administration. With this, this tariff of Trump is being seen as a ‘punishment’ for Bangladesh, which can increase economic and political challenges for Younis’s interim government.
Big trouble on Bangladesh
Under Trump’s ‘Make America Great Again’ policy, this tariff is believed to be the beginning of the global trade war, reminiscent of the 1930 Smut-Holi Tariff Act. At that time such tariffs reduced the global trade by 67%, which led to the promotion of great depression. Bangladesh economist Cellim Raihan has warned that tariffs will affect not only garments but also other export areas such as leather, shoes and medicines. He has advised to diversify export markets and increase trade with countries like India and China.
However, 85% of Bangladesh’s export income comes from the garment sector, which is difficult to transfer to other markets immediately. If Bangladesh applies counter -tariffs, Trump has warned that he will take more strict steps. This may cause Bangladesh’s economy to get caught in deep crisis.
