REFAYET ULLAH MIRDHA, MD ASADUZ ZAMAN and SUKANTA HALDER

Business leaders and economists have called upon the government to initiate immediate high-level negotiations with the United States administration following President Donald Trump’s imposition of reciprocal tariffs, warning that failure to secure concessions could erode the nation’s competitive edge in its most lucrative export market.

The collective appeal comes as Bangladesh’s ready-made garment sector, which accounts for over 90 percent of its exports to the US, now faces an expansive 37 percent tariff, a dramatic increase from the previous rate of around 15 percent.

Industry experts maintain that despite this substantial hike, Bangladesh retains significant advantages that could be leveraged during negotiations, including substantially lower production costs compared to regional competitors like China and Vietnam, both of whom have been hit with higher tariffs at 54 percent and 46 percent respectively.

The Trump administration’s sweeping tariff measures have precipitated what economists describe as the most significant transformation of international trade architecture in decades.

“The world has witnessed an unprecedented shift in the global trading regime with the introduction of reciprocal tariffs by the Trump administration, signaling a potential end, or at least a significant transformation, of the Most Favoured Nation (MFN) principle that has long been a cornerstone of the GATT/WTO framework,” said Professor Selim Raihan, executive director of the South Asian Network on Economic Modeling.

Raihan elaborated on the profound implications of this policy shift, saying, “The new system of variable, country-specific tariffs creates unprecedented uncertainty.”

For developing economies like Bangladesh that have built their growth models around predictable trade rules, this presents existential challenges, he said. “Our research indicates these measures could reduce developing nations’ export earnings by 15-20 percent annually if left unaddressed.”

The economics professor emphasised strategic adaptation.

According to him, Bangladesh must pursue a three-pronged response: domestic policy reforms to enhance competitiveness, active participation in reshaping multilateral trade institutions and the cultivation of deeper bilateral partnerships to secure preferential access.

Hafizur Rahman, administrator of the Federation of Bangladesh Chambers of Commerce and Industry, highlighted Bangladesh’s strong case for tariff mitigation.

“When we examine comparative tariff rates, we find India facing just 26 percent and Pakistan 29 percent, despite similar trade profiles. This disparity suggests considerable room for negotiation,” he told The Daily Star.

Meanwhile, Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), highlighted specific bargaining chips.

“We currently impose substantial duties on certain US imports, particularly alcoholic beverages,” he said. “A reciprocal reduction could demonstrate goodwill while costing our exchequer relatively little.

“More significantly, as the world’s fifth-largest cotton importer – with substantial purchases from American growers – we possess considerable untapped leverage.”

Industry analysts also caution that conventional negotiation approaches may prove ineffective against the Trump administration’s unconventional trade calculus.

Syed M Tanvir, managing director of Pacific Jeans, said, “The administration’s so-called ‘reciprocal’ tariffs bear little relation to actual duty structures. Their calculations incorporate trade deficit figures, perceived currency manipulation and even subjective assessments of regulatory barriers.

“To reduce our tariff burden, we must address the core metric driving these decisions – the bilateral trade imbalance.”

He said strategic increases in imports of high-value American products, particularly in defence, aerospace and advanced machinery sectors, could significantly improve Bangladesh’s negotiating position.

The executive offered a blunt assessment of political realities.

“President Trump operates as a transactional dealmaker rather than a traditional statesman. Bangladesh must structure any proposal as a mutually beneficial exchange – we need to identify concessions that deliver tangible wins he can showcase to his domestic constituency,” Tanvir said.

Anwar-Ul-Alam Chowdhury Parvez, president of the Bangladesh Chamber of Industries and a former leader of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), provided an analysis of vulnerable sectors.