Businesses call to seize reciprocal tariff suspension opportunity, find sustainable solutions

Economists and business leaders have urged the Bangladesh government to capitalise on the 90-day suspension of US reciprocal tariff, which applies to most countries, including Bangladesh. 

While acknowledging that the pause is not a permanent solution, they emphasised the need for long-term, sustainable strategies to address the underlying issues.  

These remarks were made at a roundtable discussion titled “US Tariffs on Bangladesh’s Exports: Reciprocal Strategies and the Way Forward for Negotiations” at Gulshan Club, organised by the Bangladesh Textile Mills Association (BTMA) in collaboration with trade associations from the textile, pharmaceutical, plastic, and other sectors on Saturday (April 12).  

M Masrur Reaz, Chairman of Policy Exchange Bangladesh, stressed the importance of utilizing the 90-day suspension effectively. "If we cannot seize this opportunity, we will face warnings again after 90 days," he cautioned. He called for proactive discussions to understand the expectations, priorities, and specific needs of the US government regarding trade surplus and tariffs.  

Reaz highlighted that Bangladesh is in a favorable position due to its reliance on cotton imports, unlike competitors such as India and Pakistan, which depend on domestic production. He urged the government to leverage geo-economic advantages, particularly given the high costs of sourcing goods from Vietnam and China.  

"Bangladesh needs to make strategic proposals," Reaz said. "We must establish proper infrastructure at ports and create free zones for US cotton imports to enhance bilateral trade."

He also emphasised the need for market-based and content-driven solutions rather than relying solely on the US administration.  

Muhibuzzaman, Chairman of ACI Pharmaceuticals, warned that the proposed tariffs could severely impact Bangladesh’s major industries and their value chains. However, he noted that the 90-day reprieve provides an opportunity for strategic negotiations.  

He expressed particular concern about the challenges posed by Bangladesh’s upcoming transition from Least Developed Country (LDC) status, which could negatively affect the pharmaceutical sector. "Without generics, Bangladeshi manufacturers will struggle to produce new products," he said.  

Md Anwar Hossain, Administrator of BGMEA, outlined three key areas the government is addressing: tariff issues, LDC graduation, and transshipment through India. He called for traders to support the government by providing necessary data and insights.  

"We should work on both diplomatic channels and policy fronts," Hossain emphasised. He added that the industry and government are collaborating to ensure sustainability and compliance.  

Former BGMEA President Anwar-ul Alam Chowdhury Parvez urged the government to postpone LDC graduation by three years to ease the transition. He also called for resolving critical issues related to the National Board of Revenue (NBR), gas supply, and energy to attract investment. "Swift action through diplomacy and negotiations is essential to address US tariffs," he said.  

Hafizur Rahman, Administrator of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), emphasised the need to reduce Bangladesh’s trade gap with the US. He urged the government to identify what the US expects from Bangladesh and focus on rational trade policies.  

"Vietnam and India may soon sign Free Trade Agreements (FTAs) with the US," Rahman noted. "Bangladesh should adopt a similar approach to strengthen its trade relations."  

Other speakers at the event included Shamim Ahmed, President of the Bangladesh Plastics Manufacturers and Exporters Association, and Zonayed Saki, Chief Coordinator of the Ganasamhati Andolan. Both echoed the need for coordinated efforts between the government and private sector to navigate the challenges posed by US tariffs.  

The session was moderated by Shawkat Aziz Russell, President of the Bangladesh Textile Mills Association (BTMA).  

The 90-day suspension offers Bangladesh a crucial opportunity to engage in meaningful dialogue with the US and address structural challenges in its trade relationships. Economists and industry leaders agree that a combination of strategic proposals, improved infrastructure, and collaborative efforts between the government and private sector will be vital to securing long-term benefits.