Bangladesh seeks deeper tariff cuts in talks with US as Trump imposes 35% levy

Bangladesh will hold high-stakes negotiations with the United States this week to press for deeper tariff reductions, after President Donald Trump’s administration announced a 35 per cent tariff on Bangladeshi goods. The South Asian nation’s trade delegation is seeking to protect its crucial garment export sector from a damaging competitive blow.

According to Bloomberg, Commerce Adviser to Bangladesh’s interim government, Sk. Bashir Uddin is leading the delegation in Washington for talks scheduled from 9 to 10 July. In an interview with Bloomberg from the US capital, Uddin said Dhaka is committed to finding “common ground” with Washington and is carefully reviewing the draft proposals shared by the US Trade Representative’s office.

Trade tensions threaten key export sector

Bloomberg reports that the new 35 per cent tariff, although slightly below the 37 per cent initially proposed, still risks undermining Bangladesh’s already fragile economy. The country’s ready-made garment industry, its largest export sector which employs millions and is a critical driver of foreign exchange earnings. By sharply raising costs for Bangladeshi apparel in the US market, the Trump administration’s move threatens to erode the country’s price competitiveness. This comes at a time when global demand is under pressure, and Bangladesh’s factories are already grappling with energy shortages and rising input costs.

Commerce Adviser Uddin told Bloomberg the goal in Washington is to find a “mutually win-win proposition” despite the uncertainty of the negotiations. He acknowledged the challenges posed by the evolving trade environment, describing it as “an uncertain world” for exporters and policymakers alike.

Vietnam’s better deal raises competitive stakes

Bangladesh’s urgency is sharpened by the outcome of US trade talks with Vietnam. As per Bloomberg, Hanoi managed to secure a more favourable 20 per cent tariff on its exports to the US, leaving Bangladesh at a clear disadvantage in the lucrative American apparel market.

Vietnam’s competitive edge could see global brands shift more sourcing there, dealing a further blow to Bangladesh’s garment industry. With both countries competing for the same buyers, the difference in tariff rates has become a critical concern for Dhaka.

Diplomacy seen as path to compromise

Analysts at Dhaka-based BRAC EPL Research told Bloomberg that the upcoming negotiations offer a potential pathway to ease trade tensions. They argue that proactive diplomacy could still deliver positive outcomes if Bangladesh can convince the US to lower tariff barriers. However, the window for compromise may be narrow. The Trump administration has sent formal notification letters to multiple countries detailing its new tariff schedules as part of a broader effort to rebalance trade relationships and prioritise American manufacturing.

For Bangladesh, the stakes could hardly be higher. A failure to secure concessions in Washington this week risks deepening economic vulnerabilities and undermining export growth at a critical juncture. As the talks begin, Bangladesh’s negotiators face the challenge of navigating Trump-era trade policy while protecting the livelihoods of millions who depend on the garment sector for employment.