Dhaka races against time to halt US tariff hike

Staff Reporter :

A high-level Bangladeshi delegation is set to depart Dhaka on Monday night (28 July) for Washington to participate in the third and final round of critical trade negotiations with the United States.

The two-day talks, scheduled for 29-30 July, come at a pivotal moment as Bangladesh seeks to avert the imposition of a 35 per cent tariff on its exports to the US.

While a group of business leaders will accompany the delegation, they are not expected to directly engage in the closed-door negotiations. Officials, however, remain hopeful that ongoing diplomatic efforts will yield a favourable outcome.

“We are well prepared and optimistic about reaching a positive conclusion,” Chief Adviser’s Press Secretary Shafiqul Alam told reporters at the Foreign Service Academy on Monday.

The upcoming dialogue with the Office of the United States Trade Representative (USTR) marks a decisive phase in what officials describe as Bangladesh’s “economic diplomacy” – a strategy combining trade negotiations with targeted goodwill gestures such as recent wheat imports and aircraft procurement from the US.

In a parallel effort to enhance trade relations, the government has placed an order for 25 Boeing aircraft to expand the Biman Bangladesh Airlines fleet.

Commerce Secretary Mahbubur Rahman confirmed the move, stressing its strategic dimension.

“Like India, Vietnam, and Indonesia, we see this not merely as a commercial deal but as a long-term investment in bilateral ties,” he said. The new order complements 14 Boeing jets already on order.

In a move interpreted as a diplomatic gesture, Bangladesh recently approved the import of 220,000 tonnes of US wheat under a government-to-government agreement valued at Tk817.57 crore.

Priced at $302.75 per tonne – above prevailing global rates – the deal has raised eyebrows, but Finance Adviser Dr Salehuddin Ahmed defended the decision.

“This purchase serves three purposes: to strengthen our negotiating position, diversify wheat sources, and secure higher protein content,” he explained. “Although our trade surplus with the US is modest, this goodwill gesture could yield concessions.”

While the government exudes optimism, trade analysts remain cautiously observant. Dr Mustafizur Rahman, Distinguished Fellow at the Centre for Policy Dialogue (CPD), described the wheat deal as “a bold but calculated gamble.”

“There’s no assurance the US will reciprocate with tariff relief, but if it secures better market access, the premium might be justified,” he said.

Others urged caution. Syed Moazzam Hossain of the Australia Bangladesh Chamber of Commerce and Industry (ABCCI) remarked, “Symbolic purchases may not carry much weight unless they’re supported by consistent institutional diplomacy and engagement with US private stakeholders.”

Although several business representatives are travelling with the delegation, they will not be allowed into the official negotiation sessions. Dismissing suggestions of their involvement, Dr Salehuddin stated, “They will not have access to the talks. Protests from outside won’t make a difference.”

He did, however, acknowledge the influence of the US Chamber of Commerce on policy matters.

The urgency surrounding the talks follows a formal communication from US President Donald Trump to Chief Adviser Prof Muhammad Yunus on 7 July, confirming the tariff hike – adjusted slightly from 37 per cent to 35 per cent.

Even so, the rate remains considerably higher than the 20 per cent applied to Vietnam under its trade agreement with the US.

Commerce Adviser Mahbubur Rahman is expected to join the team in Washington ahead of the 1 August deadline in a final push to sway the USTR before the new tariff comes into effect.

With Bangladesh’s crucial ready-made garments (RMG) sector at stake, the government is betting on strategic imports, high-level diplomacy, and timely concessions to safeguard its competitiveness in the US market.
Whether these efforts will succeed remains uncertain.

However, the leadership in Dhaka appears committed to securing a compromise – if not through influence, then through incentive.