Staff Reporter :
Nobel laureate economist Paul Krugman has cautioned against imposing high tariffs on clothing imports from Bangladesh, emphasising the negative impact on consumers and security.
In an interview with The New York Times, Krugman stated, “The idea of putting high tariffs on imports of clothing from Bangladesh is exactly what you shouldn’t be doing. That’s the kind of thing that is disruptive, raises the cost of living for American consumers, and does nothing to make us more secure.”
He further explained that while there is a national security rationale for domestic production and proximity-based sourcing, tariffs on countries like Bangladesh and Vietnam would undermine such efforts. “If that’s what we’re wanting to do, then we would not be levying tariffs on Vietnam and Bangladesh, and we would certainly not be putting tariffs on Canada and Mexico,” he added.
However, in response to the rising tariffs on its exports to the United States, Bangladesh has sought to boost its trade relations with the US by proposing an expansion of its duty-free product list. On Monday, Commerce Adviser SK Bashir Uddin submitted a proposal to the Office of the United States Trade Representative (USTR) requesting duty-free access for an additional 100 American products.
The move comes amid efforts to reduce Bangladesh’s trade deficit with the United States, which has been exacerbated by the tariffs imposed by the Trump administration. “Our main goal is to narrow the trade gap,” Uddin said, expressing hopes that the proposal would have a positive impact on bilateral trade relations.
In a letter to USTR, Bangladesh pledged to add 100 more American products to its duty-free list, a gesture aimed at addressing the trade imbalance and mitigating the impact of the newly imposed tariffs on Bangladeshi goods.
Under the new tariff regime, Bangladeshi products now face a total tariff of 52 per cent when entering the US market, up from the previous rate of 15 per cent. This increase comes after former President Donald Trump’s administration introduced a 37 per cent supplementary tariff on Bangladeshi exports.
As a result, products from Bangladesh, including the country’s key export – ready-made garments – will become more expensive for American consumers, potentially causing significant challenges for the garment sector, the largest contributor to Bangladesh’s exports to the US.
In 2024, Bangladesh exported goods worth $8.4 billion to the United States, while importing approximately $2 billion worth of American products. The additional tariffs have raised concerns about the future competitiveness of Bangladesh’s garment industry, which remains highly dependent on the US market.
