Bangladesh to follow WTO mechanism to deal with Trump tariff

Bangladesh will propose to provide duty facilities to the US under a multilateral trading mechanism to retain low tariffs, as the 90-day pause of Trump's reciprocal tariffs will come to an end on July 8.

"We will follow the multilateral trading system of the World Trade Organization (WTO) to address the issue of US reciprocal tariffs," said Abdur Rahim Khan, additional secretary to the commerce ministry, over the phone.

Bangladesh will follow the WTO's most-favoured-nation (MFN) principle to address the US tariffs, he said.

The MFN principle is a method under which, once a tariff benefit is given to a country, it is given to other countries.

In fact, Bangladesh has been rescheduling and updating its tariff measures and rates in preparations for upgrading the country's status to a developing nation from the group of least developed countries (LDCs) in November next year.

In the proposed budget for fiscal year 2025-26, the interim government, as a part of broader trade reforms and in preparation for tariff negotiations with the US, has sought to remove import duties on 110 products and reduce duties on 65 products.

Additionally, supplementary duties on nine products have been proposed to be withdrawn, and on 442 items have been reduced.

Commerce ministry officials are scheduled to hold an online meeting with the officials of the US Trade Representative (USTR) on Tuesday night, Khan also said.

Khan declined to comment in detail about the meeting and bilateral negotiations with the USTR, America's chief trade negotiation body.

Bangladesh will maintain the MFN tariff rate with the US when formal dialogues are held between the two nations in the near future, he added.

A source familiar with the negotiation with the US on the tariff issue, seeking anonymity, said the USTR recently had sent a second letter to the commerce ministry.

In it, the American chief trade negotiation body urged the Bangladesh government to improve labour and human rights to gain the favour for the export of goods to the US.

The Daily Star could not obtain a copy of the second letter of the USTR sent to the commerce adviser of Bangladesh.

"I welcome the positive steps your letter references with regard to Bangladesh's reform initiatives related to key US interests," said USTR Jamieson Greer in the first letter.

"…and I also encourage the government of Bangladesh to address other areas of unfair trade practices, such as labour rights violations and measures that may restrict digital trade," he said.

"We look forward to receiving a written offer from your government so that we can commence formal negotiations," he added.

"Thank you for your letter outlining your government's proactive response to the Presidential Reciprocal Tariff Action of April 2, 2025," he said.

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

Earlier, in response to Trump's 37 percent additional reciprocal tariff on Bangladeshi goods shipped to the US, Chief Adviser Professor Muhammad Yunus sent a letter to US President Donald J Trump.

In it, he offered duty facilities on the import of US goods and increasing the import of cotton, LNG and other goods from the US to reduce the gap of more than $6 billion in bilateral trade.

Commerce Adviser Sk Bashir Uddin sent another letter to the USTR offering duty-free import facilities on 100 American goods to minimise the trade gap.

Regarding the USTR letter and improvement of labour rights, Mahmud Hasan Khan Babu, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said the commerce ministry sought the BGMEA's opinion about the labour rights issues.

The government has been working to make improvements over the labour rights issue and attain international labour standards and address the US concerns, he said.

The BGMEA president also said they would meet the commerce adviser in a day or two to express their opinion on labour issues.