Speakers at a roundtable discussion have underscored the need for an effective plan to deal with the US tariff issues in the country’s export.
“A plan is needed to offset a possible 37% tariff, as competitors are already preparing. Footwear, with 42% growth and $252M in U.S. exports, risks losing momentum”, said Syed Nasim Manzur, President of LFMEAB and MD of Apex Footwear Ltd., while addressing the dialogue on Sunday.
The American Chamber of Commerce in Bangladesh (AmCham) held the event titled: “AmCham Dialogue on U.S. Tariff Impact and Way Forward” at the Sheraton Banani in the city.
The speakers emphasised the U.S. as Bangladesh’s top export market and key growth driver, with 67% of its economy driven by consumption.
The roundtable gathered leading Bangladeshi importers of U.S. goods, exporters to the U.S., AmCham members, senior officials from the Ministries of Commerce and Industries, NBR, EPB, BIDA, the Tariff Commission, other regulatory bodies, as well as researchers and economists. U.S. Commercial Counselor John Fay and other embassy officials also joined the dialogue.
AmCham President Syed Ershad Ahmed highlighted the U.S. as Bangladesh’s top export market and key investor, contributing capital, technology transfer, and expertise in sectors like insurance, hospitality, and tech. He acknowledged over 50 years of U.S.-Bangladesh ties and called for reciprocal tariff adjustments and a bilateral agreement to address trade barriers.
Ahmed praised the interim government’s efforts to address both tariffs and non-tariff barriers, noting that much work remains at the economic diplomacy level in the coming days. He also thanked government officials and U.S. Embassy staff for their participation and continued collaboration.
Syed Nasim Manzur mentioned that diversification is important, but it’s not enough. He cited the success of baseball gloves, which created 2,000 jobs for U.S. exports, and highlighted people-to-people ties and supply chain opportunities—like using U.S.-bound cowhides for footwear and collaborating on soy-based edible oil, pending pricing issues.
He noted the NBR is reviewing tariffs on 20 low-revenue items (Around $100M) and addressing non-tariff barriers. Despite challenges, he sees strong potential, with a key USTR meeting set for April 21.
He highlighted non-tariff barriers, including the need for 24/7 customs operations and stronger IPR enforcement. With the updated Patent Act, he urged presenting this progress at the upcoming USTR meeting.
He stressed that without immediate trade clarity during the 90-day tariff pause—aligned with peak holiday orders—Bangladesh risks losing the season, impacting factory viability. Payment delays and SME cash flow issues could lead to unrest in key manufacturing areas.
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He proposed a weekly progress tracker, led by senior government and supported by the private sector, to monitor key importable and seize this short-term opportunity.
Participants expressed strong support for strategically leveraging the 90-day U.S. tariff respite, with concerns about the severe impact of the 10% baseline tariff on margins and U.S. buyer confidence.
The looming possibility of a return to 37% tariffs calls for urgent, proactive measures. With high tariffs on China’s apparel exports, Bangladesh has a unique opportunity, particularly in synthetics, but must act quickly to capture U.S. demand.
There is also a call for deeper backward integration ahead of LDC graduation, and for the private sector to be included in decision-making to strengthen U.S. trade relations.
They said that the challenges in Bangladesh’s specialty sweater segment were raised, with the 10% tariff burden eroding margins and affecting U.S. buyer confidence. Scaling up capacity and reducing reliance on China for synthetics were identified as key priorities.
They observed that the next three months are seen as crucial for Bangladesh to gain market share as U.S. tariffs on China increase. Bangladesh’s compliant RMG factories are well-positioned, but government support is vital, especially in streamlining customs and addressing raw material shortages and pricing pressures.
Participants also highlighted the need for the removal of non-tariff barriers, such as unnecessary radioactivity tests, which delay imports despite global certifications on those products.
These barriers, alongside high import duties and rigid systems, are discouraging foreign investment, and policy support is needed to sustain trade and investment.
Urgent action is required to improve logistics efficiency, particularly at Chittagong Port, which is hindering competitiveness. Streamlining customs, activating bonded warehouses, and addressing raw material imports, especially cotton from China are essential to boost exports and ensure Bangladesh remains competitive.
A three-part strategy was proposed to boost Bangladesh’s trade competitiveness: (1) assess export strengths and true advantages, (2) reduce logistics and port inefficiencies to lower production and shipping costs, and (3) analyze tariff and trade barrier impacts on U.S. landed costs versus competitors.
Bangladesh exports a large share of clothing to the U.S. but holds only 10% of its clothing import market, despite clothing making up 20% of Bangladesh’s exports.
Questions were raised about why key imports like soybeans, LNG, and scrap metal haven’t scaled despite low or zero tariffs, pointing to non-tariff barriers like unnecessary testing. These should be safely removed through risk mitigation to reduce the trade deficit with data-driven decisions.
On the U.S.-Bangladesh trade gap, it was suggested that preferential duties on products made with high-quality U.S. cotton could benefit both sides. A 10% tariff (down from 37%) offers relief, but price pressures persist, especially for small factories, requiring government support.
January exports to the U.S. rose 47% due to front-loaded orders anticipating tariff effects. Though a dip may follow, the year-end outlook remains positive. Bangladesh must boost competitiveness, cut costs, and seize opportunities from shifts in China’s global trade role.
The need to prioritise IT and technology was emphasized, urging NBR to update outdated HS codes that lead to misapplied taxes. Hardware imports face a 15.5% tax, while software is taxed up to 56%, hindering digital growth.
Delays in HS code updates and inconsistent tax exemptions for IT Park investors were also noted. A workshop with NBR was proposed to resolve these issues.