Amid ongoing global economic uncertainty driven by U.S. trade policies targeting China, Bangladesh should urgently look to diversify its export destinations, said noted economist and Chairman of the Centre for Policy Dialogue (CPD), Rehman Sobhan, on Thursday.
Speaking at a CPD-hosted dialogue on the impact of U.S. retaliatory tariffs on Bangladesh, Sobhan emphasized that the trade tensions between the U.S. and China remain unresolved and are likely to shape the global economic landscape in the years to come. “It will take time to determine the nature of their relationship, but it’s clear that this will be a defining issue for the global economy,” he said.
“The United States is Bangladesh’s largest export market. But the level of uncertainty there is now so great that we must adopt a strategy to increase exports to the European Union, Canada, Australia, Japan and emerging markets in Asia,” he said at a CPD dialogue.
In an abrupt move, the Trump administration imposed a 37 percent reciprocal tariff on imports Bangladeshi goods, which was later paused for 90 days with keeping 10 percent additional tariffs.
“We need to navigate away from this uncertainty. If that market becomes unstable, we must seek alternatives,” he said.
In this shifting environment, Sobhan stressed that Bangladesh should proactively explore alternative markets over the next five years.
He stressed that Bangladesh must leverage its existing competitive advantages to further penetrate the European Union, where Bangladesh still enjoys tariff-free access for several more years.
Highlighting the growing significance of Asia, Sobhan remarked, “Asia is emerging as the center of global economic and trade growth, and within the next 25 years, it is expected to be the largest contributor to global economic expansion.”
The dialogue, held at a Dhaka hotel, featured a keynote presentation by CPD Distinguished Fellow Dr. Mustafizur Rahman, with Executive Director Dr. Fahmida Khatun moderating the session.
In his keynote, Prof Mustafizur revealed that while Bangladesh earned $180 million in import duties from U.S. goods in 2024, the U.S. collected a much larger $1.27 billion in duties on Bangladeshi exports.
Currently, Bangladesh imposes an average tariff and other duties of 6.2 percent on US imports, which drops to 2.2 percent when rebates are factored in. In contrast, US tariffs on Bangladeshi imports average 15.1 percent.
“Now, the question is who is actually giving market access to whom,” Mustafizur remarked, sending a cautious note about giving further duty benefits to the U.S.
“If we grant zero-tariff access to the top three U.S. export products, we would be obligated to extend the same benefits to other countries, resulting in a $170 million loss in tariff revenue,” he explained.
“This suggests that simply reducing tariffs won’t be a sufficient strategy,” he noted.
Former member of the Bangladesh Tariff Commission, Mustafa Abid Khan, echoed similar concerns. “We must first understand that these are not reciprocal tariffs. No matter how much we respond, we may not benefit unless we comprehend what the U.S. truly wants. Continued dialogue is essential,” he stated.
He also suggested exploring the possibility of a Free Trade Agreement (FTA) with the U.S., though he admitted it would be a challenging process. “Every time we’ve tried, the U.S. has told us Bangladesh is not yet ready.”