Bangladesh will review its reciprocal trade deal with the United States (US) after the Supreme Court of the US struck down many of the Trump administration’s sweeping and often arbitrary duties, said a senior Commerce Ministry official today.
Following the court’s decision, the US President announced a 10 percent additional tariff on all countries. If finalised, Bangladesh will face a 26.5 percent tariff in addition to the existing 16.5 percent.
“First we will analyse the deal, and then we will take a decision,” Khadija Nazneen, additional secretary of the WTO wing of the Commerce Ministry, said in response to The Daily Star.
She said the agreement signed by Bangladesh with the US contains an exit clause.
“Only in the case of Bangladesh is there an exit clause in the deal. No other country with which the US has signed a tariff deal has such a clause. So, we will decide as per government policy,” said Nazneen, who led the Bangladesh delegation that signed the deal in Washington on February 9.
She did not elaborate on the implications of the Supreme Court’s ruling for Bangladesh’s trade with the US.
Another senior Commerce Ministry official, requesting anonymity, said the ruling scrapped the entire deal, meaning it may no longer be applicable to Bangladesh.
“However, we will discuss it in detail soon to take the necessary actions. There is a possibility of cancellation of the deal signed with Bangladesh, as the whole agreement has been struck down,” the official said.
Bangladesh was among a few countries that signed the American Reciprocal Trade (ART) deal with the US on February 9, securing a reduction in the reciprocal tariff rate to 19 percent from 20 percent.
The US is Bangladesh’s single largest export destination. The interim government signed the deal with the Trump administration to secure market access, though it drew criticism for being one-sided.
Trump declared reciprocal tariffs as part of a national emergency on April 2 last year. Initially, a 37 percent tariff was announced for Bangladesh, later reduced to 35 percent. After negotiations, it was brought down to 20 percent and subsequently to 19 percent following the deal.
The 19 percent reciprocal tariff was in addition to the existing 16.5 percent duty, taking the total effective average tariff to 34.5 percent. If the proposed 10 percent additional tariff is implemented, the tariff rate would stand at 26.5 percent.
Faisal Samad, a director of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said it was too early to comment.
“It is a legal matter. We need a few working days to understand the clear picture before making any comment,” he said.
He added that exporters are hopeful that if the 10 percent rate is fixed and the total effective tariff stands at 26.5 percent, Bangladesh may benefit.
