Trump tariffs: Lower tariffs, higher import of US goods on the cards

Bangladesh will propose lowering the import tariff for certain American goods and increasing the volume of imports of some items as part of the efforts to narrow the trade gap with the US, which elicited a fresh 37 percent reciprocal tariff from the Trump administration.

The import trend of some goods from the US suggests there is room for more.

For instance, in 2023, Bangladesh imported cotton worth $2.22 billion from all over the world, with the US accounting for just $336.52 million, according to a primary document seen by The Daily Star that is under preparation to assist the government.

The US share in global cotton export was 35.81 percent, and the import duty of US cotton in Bangladesh is zero percent, said a person who is familiar with the document.

Similarly, in 2023, Bangladesh imported propane or liquefied petroleum gas (LPG) worth $1.9 billion, of which $51.32 million came from the US.

That year, the total worth of LPG exported by the US was $20.88 billion, with Bangladesh accounting for 0.25 percent of this purchase. The tariff on LPG imports from the US is zero.

Similarly, primary estimates suggest that Bangladesh has a lot of room to import more soybean products, wheat, natural gas, gold, corn, human vaccine, jewellery articles, boards and panels from the US.

The country would also offer to import products that the US exports heavily worldwide but currently hold a small share in Bangladesh's import basket, the document showed.

Those products are cotton, ferrous waste and scrap, natural gas, wheat, light oils, milk and cream.

Commerce Secretary Mahbubur Rahman said, "We have not received this document yet, although we are preparing our reply for the US government. We will send our reply to the United States Trade Representative (USTR) within two to three days."

Bangladesh will rationalise the tariff rates following the Most Favoured Nation (MFN) system of the World Trade Organisation (WTO), as both the US and Bangladesh are members. The MFN rate means that the rate given to the US must be the same for other countries as well.

The National Board of Revenue is working to find 100 goods on which Bangladesh can offer duty reduction, Rahman said.

Moreover, Bangladesh has already paid the arrears of three American companies and is getting ready to make full payment to Oracle, he added.

Bangladesh will also promise to reduce the non-tariff barriers for the ease of doing business and refrain from using counterfeit software in different offices.

During last month's meeting, the USTR suggested that Bangladesh source the goods directly from America. For instance, Bangladesh imports cars from General Motors and LG goods from other countries such as Korea and India, although these are American brands.

Bangladesh will also give preference to Boeing when it purchases aeroplanes, Rahman said.

Meanwhile, in a letter sent to Commerce Adviser Sk Bashir Uddin on May 7, USTR Ambassador Jamieson Greer suggested that Bangladesh address areas of unfair trade practices, such as labour rights violations and measures that may restrict digital trade.

"My team is ready to engage with Bangladesh to address the persistent bilateral trade deficit by reducing Bangladesh's agricultural and industrial tariff and non-tariff barriers as well as aligning with the United States on economic security matters," Greer said in the letter.