Bangladesh’s third round of critical trade negotiations with the United States is off to a promising start, with senior officials indicating that Washington may offer substantial reductions in countervailing tariffs aimed at Bangladeshi exports.
On the first day of talks in Washington, Commerce Secretary Mahbubur Rahman told reporters:”Officials from the U.S. Trade Representative’s Office have said that the counter?tariffs imposed on Bangladesh will be reduced. Our tariffs will be reduced by a considerable amount. However, it is not possible to say the specific rate yet. We have more meetings today and tomorrow. We are optimistic that something positive will happen for Bangladesh.” Round Three Begins: Key Delegation on the Ground: The high?level talks began in Washington between 12:30 pm and 5:30 pm local time on Tuesday (3:30 pm?8:30 am Bangladesh time). The Bangladeshi delegation was led by Prime Minister’s Trade Adviser Sheikh Bashiruddin, joined by National Security Adviser Khalilur Rahman, Commerce Secretary Mahbubur Rahman, Additional Secretary Nazneen Kausar Chowdhury, and senior embassy officials. U.S. leadership was provided by Assistant USTR Brendan Lynch. Tariff Background: Trade Pressure Mounts: In April 2025, the Trump administration imposed blanket countervailing duties on imports from 60 countries, including Bangladesh. Initially suspended for 90 days on April 9, the tariff was reinstated at a 35% rate, effective August 1. This is on top of an average baseline duty of 15.5%, which risks raising effective rates to over 50%-a crippling blow for Bangladesh’s export sectors.Walmart has already delayed some Bangladesh-manufactured apparel orders, fearing the tariff hike would make production financially unsustainable for factories, particularly small and medium enterprises.
Bangladesh’s Strategy: Trade-Offs and Offers: To mitigate the tariff threat, Bangladesh has presented a position paper to USTR (submitted July?22), outlining commitments to increase imports from the U.S. to help narrow the trade deficit-currently around US$6?billion, modest compared with Vietnam’s $123?billion deficit with the U.S. Key pledges include:Importing 700,000 tonnes of U.S. wheat annually for five years;Purchasing 25 Boeing aircraft, later expanded from an initial plan of 14;Buying additional U.S. goods: soybean oil, LNG, cotton, military equipment, etc.Commerce Secretary Rahman stated Bangladesh could grant duty?free access to up to 290 U.S. products in exchange.
Negotiation Evolution: From Stalemate to Momentum: Earlier rounds had stalled over contentious elements such as:Washington’s requirement for Bangladesh to adopt 40% local value?addition on apparel products;Compliance with U.S. geopolitical trade alignment clauses-forcing Dhaka to mirror U.S. sanctions, particularly affecting China-linked exports.By the second round in early July, however, both sides reportedly resolved most issues in principle, according to The Business Standard. Final tariff rate discussions remained ongoing.
Commerce Officials Hopeful of a 15-20% Rate: Officials suggest Bangladesh could receive a tariff level closer to 15-20%, aligning it with or slightly exceeding current average duty rates-far lower than the punitive 35%.
Finance Adviser Dr. Salehuddin Ahmed expressed optimism:”We are hoping the tariff will be lowered for us… Bangladesh’s trade deficit with the U.S. is very low…”
Export Sector at Risk: A successful outcome is critical for Bangladesh’s export backbone-the readymade garments industry, which accounts for about 80% of its garment exports and 10% of GDP. Analysts warn the 35% tariff could make Bangladeshi products uncompetitive, shifting orders to rivals like India and Vietnam.
Why U.S. is Engaging: Model of Vietnam Featuring Zero Imports: The U.S. has already secured reciprocal tariff deals on lower rates with countries like Vietnam (20%), UK (10%), Indonesia (19%), and the EU (15%). Bangladesh is hoping to follow suit.In negotiations, Dhaka has offered zero duty access for key U.S. exports such as cotton, corn, wheat, and semiconductors and agreed to reduce or remove non?tariff barriers and improve transparency in procurement and investment operations.
Timeline & Outlook: The third round of talks began July 29 and concludes Thursday, July 31.If successful, Bangladesh could avoid the 35% tariff slated to take effect August 1.Bangladesh may offer duty exemptions worth approximately Tk?648 crore in exchange for tariff relief-a gesture to deepen trade cooperation.
What Key Officials Are Saying: Mahbubur Rahman (Commerce Secretary):”We are engaged with the USTR full time” and “expecting a better deal as...the USTR talks continue.”
Dr. Salehuddin Ahmed (Finance Adviser):”The result of the talks will be favorable...we will take necessary measures accordingly.”
What Comes Next: Finalization of tariff deal: A favorable outcome could shield exporters from a crippling duty hike.Impact on garment sector: Exporters hope to maintain market access and avoid order cancellations such as those seen from retailers like Walmart.Broader economic ties: Bangladesh’s government aims to leverage the talks to deepen imports of U.S. goods, bolster investment confidence, and improve market access.Legal uncertainty: U.S. presidential tariff authority is under scrutiny in courts; some rulings have challenged the implementation of Trump’s blanket tariffs, potentially affecting outcomes.
Final Thoughts: Bangladesh’s tariff negotiations with the United States have reached a critical juncture. With the first day suggesting potential tariff reductions, Dhaka appears to have made strategic offers-import mathematics, duty concessions, and diplomatic overtures-to avoid an economically devastating burden on its export sector.If a deal implementing a 15?20% effective tariff is reached, it would mark a significant lifeline for Bangladesh’s apparel-driven economy. Failure, however, may push duties to punitive heights of 35-53%, risking volume collapse in one of its most vital foreign exchanges?earning sectors.Ultimately, Bangladesh’s tactical diplomacy-following Vietnam’s blueprint, offering reciprocal concessions, and emphasizing trade balance improvements-may yet defuse the tariff threat. With three days of high-stakes negotiations underway, the outcome will influence both short?term export resilience and the longer arc of Bangladesh-U.S. trade relations.