In a significant development for South Asian trade, Bangladesh has indicated a potential major shift in its economic relationship with the United States. Recent high-level discussions in Washington have opened the door to reduced tariffs and preferential market access for Bangladesh's crucial textile and apparel exports, marking a possible breakthrough after years of standard trade terms.
A Step Towards Mutually Beneficial Partnership
Following the talks, Bangladesh's chief adviser, Muhammad Yunus, described the dialogue as an "important step forward" in building a stronger, more beneficial economic partnership between the two nations. The central request from Dhaka focuses on lowering the current 20% reciprocal tariff rate that Bangladesh faces on its exports to the US market.
This request was formally presented by National Security Adviser Dr Khalilur Rahman during his visit to Washington. In response, US Trade Representative Ambassador Jamieson Greer has agreed to raise the possibility of a tariff reduction with President Donald Trump. Such a move would align Bangladesh's tariff treatment more closely with that of its regional competitors and could significantly expand access for its vital garment sector, which is a cornerstone of the country's economy.
Strategic Wheat Imports to Ease Tensions and Imbalance
The trade negotiations are progressing alongside a concerted effort by Bangladesh to reduce trade tensions through increased purchases of American agricultural products. As a key part of this strategy, Dhaka has recently approved the purchase of approximately 220,000 metric tonnes of US wheat under a direct government-to-government agreement.
This deal falls under a broader memorandum of understanding signed in July, which commits Bangladesh to importing 700,000 tonnes of US wheat annually for the next five years. Officials state this approach serves a dual purpose: diversifying Bangladesh's grain sources and addressing the substantial trade imbalance with the United States.
Addressing the Growing Trade Deficit
The numbers underscore the urgency of rebalancing the trade relationship. In 2024, the total two-way trade in goods and services between the US and Bangladesh reached an estimated $12.4 billion, reflecting a 3% increase from the previous year. A deeper look reveals a pronounced gap:
- US goods exports to Bangladesh saw a modest rise to $2.3 billion.
- US imports from Bangladesh, however, climbed to a substantial $8.4 billion.
This resulted in a goods trade deficit of $6.1 billion for Washington. The new strategy of coupling potential export advantages for Bangladesh with guaranteed imports of US wheat is seen as a pragmatic step to narrow this gap and foster a more sustainable long-term trade partnership.
