Bangladesh offers duty-free access to 100 more US products to cut trade gap

Commerce Advisor Sheikh Bashir Uddin hopes the move will have a positive impact as he outlines the government's aim of reducing the trade gap

Commerce Advisor Sheikh Bashir Uddin has outlined Bangladesh's aim of reducing the trade deficit with the United States in order to offset the additional tariffs imposed by the Trump administration on Bangladeshi products.

As part of the effort to narrow the gap, Bangladesh has written to the US, pledging to add 100 more American products to its duty-free list, according to the advisor.

“We hope the letter will have a positive impact. Our main goal is to narrow the trade gap,” he said on Tuesday.

Bangladesh exports goods worth $8.4 billion to the US, while importing around $2 billion worth of American products. In a move to reduce trade imbalances, the Trump administration has imposed additional tariffs on imports from over 100 countries.

Previously, Bangladeshi products faced a 15 percent tariff in the US. With the addition of a 37 percent supplementary tariff, Bangladeshi exports now face a combined tariff of 52 percent when entering the US market.

The US is the largest market for Bangladeshi ready-made garments. With the imposition of the new tariff, there is growing concern that Bangladesh’s garment sector could face a serious blow.

Bashir Uddin said, “Our goal is to reduce the trade deficit. We are currently reviewing which products can help achieve that.”

To reduce trade disparities with the US, Bangladesh has already waived tariffs on 190 American products. Now, it plans to add another 100 items to the duty-free list.

In a letter sent to the Office of the United States Trade Representative (USTR), the commerce advisor said that after the withdrawal of preferential market access for Bangladeshi goods, all exports from Bangladesh to the US were now subject to an average tariff of 15 percent. In contrast, Bangladesh imposes an average tariff of 6.10 percent on US imports.

Bangladesh primarily imports raw cotton and scrap iron from the US. The tariff rates on these two products are 0 percent and 1 percent, respectively.

The letter noted that the US was one of the top exporters of cotton to Bangladesh, which is used in the country’s apparel industry. However, the increased tariffs on garments and other goods exported to the US are harming Bangladesh’s export sector.

The letter also outlined several reform initiatives Bangladesh is willing to undertake to reduce the trade gap with the US. These include eliminating non-tariff barriers, simplifying the customs process, ensuring intellectual property protection, and safeguarding trademarks and patents.

Describing the current situation as “quite volatile,” the advisor added: “Yesterday, the US administration said it may impose an additional 50 percent tariff in response to retaliatory tariffs announced by China. Under such circumstances, making any decision becomes complicated. We will determine our next steps after observing how the situation evolves.”