Dhaka eyes deep cut in US tariff as deadline ends

As the tariff talks between Bangladesh and the United States wrap up today, Dhaka is expecting a deal that would see tariffs on its exports to the American market well below the steep 35 percent rate imposed by the Trump administration from August 1.

Officials said Bangladesh is "very close" to the signing of the trade agreement with the US, agreeing to increase imports of American goods to narrow the trade gap between the two countries.

US President Donald Trump is expected to announce the new tariff rate for Bangladesh later today.

The development follows the latest round of three-day negotiations with senior officials from the United States Trade Representative (USTR), Washington's top trade negotiating body.

Bangladesh's delegation was led by Commerce Adviser Sk Bashir Uddin, and included National Security Adviser Khalilur Rahman, Commerce Secretary Mahbubur Rahman, and an additional secretary from the commerce ministry.

On the US side, Assistant Trade Representative Brendan Lynch headed the team, joined by officials handling trade and tariff matters.

On condition of anonymity, an official familiar with the talks said, "Substantial progress has been made during the discussion and both countries are very close to the signing of the agreement."

"I cannot exactly say what the percentage of the tariff would be in the case of Bangladesh. Only I can say the tariff rate for Bangladesh will be much lower than the 35 percent, imposed earlier by Trump," the official added.

Bangladeshi private sector importers also played a key role in shaping the outcome, especially those shipping in American wheat, soybean, liquefied petroleum gas (LPG) and cotton. Their coordination with US suppliers helped pave the way for the likely tariff cut.

Throughout the talks, the USTR urged Bangladesh to reduce its reliance on Chinese industrial inputs, such as fabrics, yarn, accessories, chemicals and machinery, according to the same official.

To minimise the trade gap, which currently favours Bangladesh, Dhaka has agreed to import large volumes of soybean seeds, cotton, wheat and LPG from the United States.

"The American private sector, especially exporters of soybeans, cotton and LPG, has shown strong interest in expanding shipments to Bangladesh and have lobbied their government to clinch this deal," the official said.

He added that Bangladesh could soon import these goods worth over $2 billion, provided the government offers policy and logistical support to increase imports from the US.

On the likely tariff outcome, the official said Bangladesh may get a rate much lower than India's, which currently stands at 25 percent "plus an unspecified penalty".

"Bangladesh's position is very strong in this negotiation. The American suppliers of wheat, cotton, LPG and soy seed also pushed the Trump administration for a lower tariff for Bangladesh," he said.

Trump's pause of what he called "reciprocal" tariffs, announced on April 2, expires on August 1. Once it ends, higher tariffs could come back into play, according to CNBC.

So far, the US has signed only 8 agreements in the past 120 days, including one with the 27-member European Union, according to CNBC.

Tariffs already imposed by Washington include 20 percent on Vietnam, 19 percent on Indonesia and the Philippines, 10 percent on the UK, 25 percent on India, and 15 percent on Japan, the EU and South Korea.