Recently, US President Donald Trump imposed tariffs ranging from a maximum of 49 percent to a minimum of 10 percent on various countries. In that case, another 37 percent has been added to the previous 15.5 percent on Bangladeshi products. On the other hand, the tariffs imposed on China, India, Pakistan, Vietnam, Sri Lanka and Israel are 34, 26, 29, 46, 44 and 17 percent respectively.
Before taking office as president, Donald Trump had announced additional tariffs on Chinese products as a candidate for the election, to which Russia and Canada were added soon after taking office. However, it was later reduced to a large extent on Russia and Canada. However, the way he announced additional tariffs on many countries including China at the same time in this round, it is reported that the exporters, governments and even the general public of those countries, including Bangladesh, have been shaken together. However, there is still ample opportunity and potential to reduce or increase this rate through review, and it can be said with almost certainty that many countries in the world will be successful in doing so.
And in such a situation, how much Bangladesh can do in this regard through diplomatic diplomacy is also a matter of concern. It is worth noting that the Chief Advisor has already announced that this rate will be reduced through discussions with the United States.
The annual export volume of goods from Bangladesh to the United States is now approximately $8.5 billion. The actual volume in this regard in the fiscal years 2022-23 and 2023-24 was $8.58 billion and $7.34 billion respectively. The government has been working to increase this volume to $10 billion by 2030, as claimed in the previous announcement. In this situation, in view of Donald Trump’s announcement regarding the imposition of increased import duties, the government may feel somewhat worried about maintaining that target. My opinion is that although the matter is worrying, it would not be appropriate to reduce the target at all. Rather, it is important for us to think about how to achieve it while keeping the target intact. However, in doing so, this situation cannot be used as a pretext to grab benefits and advantages like during the Corona period or the Ukraine war, which there is a considerable risk of doing.
The entrepreneurial culture of Bangladesh over the past five and a half decades says that in the wake of Trump’s announcement of high tariffs, Bangladeshi exporters, especially the owners of the ready-made garment industry, are likely to soon demand additional cash incentives, tax reductions, loan interest waivers and other financial benefits from the government. And there is no chance of dismissing the fear that the business and bureaucrat-dominated government will be sympathetic enough to their demands. However, whether that fear is proven wrong is not only desirable but also essential for the larger interests of the people and economy of the country. But it remains to be seen how effective the ruling interim government will or will be able to play that essential role. In this regard, a humble request to the business and trade advisor - the interests of the businessmen must be seen, but in no way at the expense of the overall interests of the country, people and economy. The request is that please do not lean towards increasing cash incentives to counter the additional tariffs of the United States. Rather, it would be a better approach to try to deal with the situation by increasing speed and efficiency in other areas outside the incentives. But if instead of doing so, moving towards increasing cash incentives, then in this country with a huge revenue deficit, it would be a clearly anti-public interest initiative.
And in that case, some steps can be taken. Such as a. Reducing transportation time and transportation costs by eliminating irregularities, corruption, inefficiency and delays in the country’s seaports and airports; b. Reorganizing state departments related to taxes and customs to follow the interests of entrepreneurs; c. Providing additional information and advice to entrepreneurs and exporters by the Export Promotion Bureau (EPB), Business Promotion Council (BPC) and other state institutions related to exports; d. In order to facilitate the import of raw materials for export products, determining import entitlements, opening letters of credit (LC), determining the amount of customs duty, clearing goods, etc., should be harassment-free and expedited; e. Keeping the internal transportation system free from extortion and other obstacles, etc.
Most of the above-mentioned corrective and adjustment measures under the existing framework are of an immediate nature. Apart from these, from the long-term perspective of export development, some proposals related to other measures that need to be considered on an urgent basis are also presented here for the state’s consideration. 1. Alternative markets for Bangladeshi products should be found in Japan, Australia, New Zealand and other countries in Central Asia, Africa and South America outside the United States and Europe. 2. New export products should be found outside ready-made garments, which will make it possible to reduce the sole dependence on ready-made garments through exports (the issue has been discussed for a long time, but there has been no significant progress). 3. The production of medicines, leather products and similar products with export potential should be increased, which are capable of increasing income quickly even by exporting small amounts due to their high value. 4. Both encouragement and assistance should be given by state institutions to the entrepreneurs concerned to improve the quality and productivity of products.
Although there is ample reason to be concerned about Donald Trump’s imposition of high tariffs on various products seeking to enter the US market, it would not be appropriate to panic at all. Rather, instead of panicking, steps should be taken to reduce these tariffs as soon as possible through diplomatic efforts before they take effect. In fact, the criteria have been set in such a way that US global politics is successful. And that is why, while the tariffs in the case of Vietnam, Sri Lanka and Bangladesh are 46, 44 and 37 percent, in the case of Israel or the UK it is only 17 and 10 percent. Therefore, these issues must be taken as important comparisons (references) while conducting diplomatic activities. Moreover, it should also be mentioned that these unilateral steps of Trump are inconsistent with some of the protocols signed by the US and the relevant countries with the World Trade Organization (WTO).
In short, Donald Trump’s imposition of tariffs on Bangladeshi products must be addressed through very subtle diplomatic maneuvers.
