Bangladesh in talks with US on LNG imports to address tariffs, trade gap

Officials see US LNG as a new source beyond GCC amid looming tariff pressure under Trump’s new “reciprocal tariff” policy

Bangladesh is exploring US-sourced liquefied natural gas (LNG) imports as part of its strategy to reduce the growing trade deficit with the United States and counter the impact of new tariffs on exports.

Bangladesh Investment Development Authority (BIDA) Executive Chairman Chowdhury Ashik Mahmud Bin Harun shared this at a press briefing on Sunday ahead of the upcoming investment summit.

“We’ve been in discussions with the US since February on how we can reduce the trade deficit,” he said.

“One of the major areas in this effort is energy,” he added.

He noted that the Donald Trump administration had decided to resume LNG exports and that Bangladesh had already initiated talks with Washington to source gas.

“So, this creates a new source of energy imports for us – the US now becomes an option alongside the traditional GCC [Gulf Cooperation Council] markets,” he said.

The move comes as Bangladesh faces the threat of a sharp rise in duties on its exports to the US under Trump’s new “reciprocal tariff” policy.

Once the new supplementary duties come into effect, Bangladeshi products will face up to 52 percent in total tariffs while entering the US market – up from the previous average of 15 percent.

This includes a 37 percent additional duty specifically targeting hundreds of countries, including Bangladesh.

The US is Bangladesh’s largest export destination for readymade garments.

In 2024, Bangladesh exported nearly $8.4 billion worth of goods to the US, of which $7.34 billion were garments.

Industry stakeholders have expressed concern that the new tariffs could severely impact the garment sector.

In light of this, Chief Advisor Muhammad Yunus held an emergency meeting on Saturday with top advisors, experts, and government officials to review the situation.

After the meeting, it was confirmed that the government had already been in touch with the US before the tariff announcement and that the chief advisor would directly engage with the Trump administration on the issue.

When asked whether LNG imports from the US could help offset the tariff impact and address Bangladesh’s energy shortages, the BIDA chairman said:

“Buying gas from the US can help with both – balancing the tariff impact and diversifying our energy sources.”

“If we can leverage that market effectively, I believe we can overcome our energy supply shortage. If we manage that, I don’t think it’ll remain a problem,” he added.

Highlighting early preparations, Ashik said: “We’ve been talking to the US government since February about rebalancing our trade. When our high representative visited, officials at USTR [United States Trade Representative] told us clearly, ‘you are the first country under this administration to say you want to rebalance the trade deficit’.”

“That’s why we didn’t panic or rush to send letters yesterday. We believe we already have an entry point. Based on our ongoing engagement, we’ll take measured steps within our timeline,” he said.

Ashik outlined the government’s position, saying: "We are confident that we will be able to move forward with a solid plan in collaboration with the US administration. We are not at all worried."

Bangladesh has already begun purchasing LNG from the US company Excelerate Energy.

On Mar 11, the Cabinet Committee on Public Procurement approved the purchase of one cargo of LNG from the company for over Tk 6.64 billion.

When asked about assurances regarding the energy deficit at the upcoming investment conference, Ashik said: “Our main problem is gas supply. We extract 50 percent of the gas we need domestically, while the remaining 50 percent has to be imported.”

He added, “We have faced a major issue with imported gas due to the dollar shortage. Because of this crisis, we were often unable to make payments, which affected our reputation. As a result, when we were sending requests for proposals (RFP) for new cargo, we couldn’t get competitive pricing.”

However, with stability in the foreign currency reserves, the situation is expected to improve, according to the BIDA chairman.

"The governor is now saying that we may not need IMF financing due to this stability," he said.

He added, “Once our liquidity situation stabilises and we can make payments, this 50 percent import gap will become much easier to manage.”

Ashik expressed hope that once long-term contracts with suppliers are implemented, the situation would normalise by February 2026.

He noted, “We had signed several long-term contracts during the previous government’s tenure, and I do not wish to take credit for them. These will come into effect from January 2026, and after February, the pressure on us will naturally ease.”

Ashik said the government is working on a BIDA proposal to allocate “heavy pressure” gas from pipelines exclusively for industrial use.

He explained, "Governments in many countries fully guarantee the energy supply to industrial factories. People use LPG, cylinders, etc., for household gas. However, the 'heavy pressure' gas from pipelines should be dedicated to industrial use. We need to move in that direction. Consumers who use gas for cooking do not require heavy pressure gas."

He added, "Those who need gas for cooking should purchase it when they receive their salary. They will receive their salary when the industry is running. Therefore, we must prioritise the gas supply for industries, and then we can plan for the rest."

Referring to the US tariffs, Ashik noted during Saturday’s press conference, "Before the investment conference, a situation arose, prompting the question of what we can do in such a scenario. If you ask me, I see it as 'half full’. This is because, based on the USTR report on Bangladesh, many decisions have been made."

He continued, "The report outlines some fundamental reforms needed in areas such as customs, corruption, and intellectual property. These are reforms that we ourselves wanted to implement. We wanted the investment system in Bangladesh to be easier for future investors.

“The extra challenge will lead to positive outcomes. In fact, we will be able to carry out many reforms in our investment system. I don’t see any negative aspects to it. I believe we can make significant progress in improving our overall investment environment."

Highlighting that the US has imposed high tariffs on many countries, he said: "Our competitors are in the same boat as us. Whatever path they take, we will almost follow the same direction."

He added, "So, I'm not worried that the sudden policy change by the US, just days before the investment conference, will have a large negative impact. Personally, I see it as a good sign. We will take it as an opportunity and try to create an even better investment environment in Bangladesh."

Regarding concerns about the impact of Trump's policies on Bangladesh's investment environment, he said: "If the global macroeconomy is negatively affected, it will impact everyone equally."

He also remarked, "For instance, the new policies of Donald Trump, or the announcement he made, will not only affect Bangladesh in terms of inflation and interest rates but will affect everyone. So, it must be viewed in relative comparison. I do not think it will have a major impact on Bangladesh’s competitive advantage in that regard."

He concluded, "If there is inflationary pressure due to this policy, it will apply to everyone, and I don't believe it will be more damaging for Bangladesh compared with other countries."