In a welcome development for Bangladesh’s export sector, the United States has reduced the counter-tariff imposed on Bangladeshi products by 15%. The new rate now stands at 20%, significantly lower than the previously announced 35%.
The announcement came on Friday through a White House release outlining revised counter-tariff rates on several countries. According to the statement, Pakistan now faces a 19% tariff, Afghanistan 15%, India 25%, Brazil 10%, while Indonesia, Malaysia, and the Philippines are each subject to a 19% rate. Sri Lanka and Vietnam have been assigned a 20% tariff, and Myanmar faces the highest rate at 40%.
Positive Signals Emerged During Bilateral Dialogue
Encouraging signals regarding tariff adjustments had already surfaced during the first day of the third round of U.S.-Bangladesh Trade Dialogue held in Washington. Bangladesh’s Commerce Secretary stated that the Office of the United States Trade Representative (USTR) had assured that Bangladesh was being considered favorably for tariff relief.
Initial Threats of Tariff Hike and Bangladesh’s Strategic Response
On April 2 this year, the U.S. announced plans to impose counter-tariffs on goods from 60 countries. While implementation was postponed for three months from April 9, a renewed declaration on July 8 indicated a 35% counter-tariff on Bangladeshi goods effective August 1. This sparked concern among exporters over potential disruptions and competitiveness loss.
Currently, Bangladeshi goods exported to the U.S. face an average tariff of 15.5%. A 35% counter-tariff would have driven this up to 22–23% or more, severely impacting key sectors like garments.
Achievement Rooted in Data and Strategic Advocacy
To address this challenge, Bangladesh adopted a multi-pronged strategy. On July 23, it submitted a detailed policy position paper to relevant U.S. authorities. The paper highlighted that the U.S. trade deficit with Bangladesh is relatively modest—around $6 billion—whereas its deficit with Vietnam stands at approximately $123 billion. Despite this, Vietnam was only assigned a 20% tariff.
Bangladesh argued that such a disparity in tariff treatment was unjustified and warranted reconsideration. In response, the U.S. partially accepted the rationale, reducing the previously planned tariff by 15 percentage points and finalizing it at 20%.