Trump’s decision to publicise these tariff letters through social media – before mailing official copies – has drawn criticism from diplomatic observers. Unlike his predecessors, who typically handled trade negotiations through private channels, Trump has opted for a direct and public approach.
In a move set to impact Bangladesh’s key export sector, US President Donald Trump today announced a 35 per cent tariff on all goods imported from the South Asian nation, effective August 1. The decision, made public through Trump’s Truth Social platform early Tuesday Bangladesh time, marks a 2 per cent drop from the initially proposed 37 per cent rate but remains more than double the previous 15 per cent average tariff on Bangladeshi goods.
The announcement came via an official letter dated July 7 and addressed to Dr Muhammad Yunus, Chief Adviser to Bangladesh’s interim government. Similar letters were reportedly sent to leaders of several other nations, each outlining their new tariff rates as part of Trump’s ongoing overhaul of global trade relations.
“Please understand that the 35 per cent number is far less than what is needed to eliminate the Trade Deficit disparity we have with your Country,” Trump wrote in the letter. “There will be no Tariff if Bangladesh, or companies within your Country, decide to build or manufacture product within the United States.”
Trump’s message also came with a warning: any retaliatory tariff by Bangladesh would be matched with further US tariff increases. “Whatever the number you choose to raise them by will be added onto the 35 per cent that we charge,” he stated.
Bangladesh Among Several Nations Targeted
Bangladesh is not alone in facing higher US tariffs. Myanmar and Laos will see the steepest duties at 40 per cent, followed by Cambodia and Thailand at 36 per cent, Serbia at 35 per cent, Indonesia at 32 per cent, and South Africa and Bosnia and Herzegovina at 30 per cent. More developed economies like Japan, South Korea, Kazakhstan, Malaysia, and Tunisia will face a 25 cent tariff.
The move comes amid Trump’s push for “reciprocal tariffs,” a policy he has pursued aggressively since returning to the White House. These unilateral tariff decisions are seen as a sign that back-channel negotiations with multiple countries, including Bangladesh, have not yielded desired outcomes for the US.
Vietnam Gains Competitive Edge
Notably, Vietnam, a direct competitor of Bangladesh in the global ready-made garment industry, has emerged with a more favourable deal. Following a new trade agreement with the US, Vietnam will now face a 20 per cent tariff – significantly lower than the 46 per cent rate initially planned. In exchange, Vietnam agreed to eliminate all tariffs on US imports.
This bilateral deal places Bangladesh at a disadvantage, especially given the significant role that the readymade garments sector plays in its economy. In the last fiscal year (2023–24), Bangladesh earned around Tk 15 billion from tariffs on US imports, but the new US policy could prompt economic disruption in its export-oriented industries.
“If US buyers are unwilling to absorb the increased cost, Bangladeshi exporters may be forced to lower prices, squeezing already thin margins,” trade analyst Mahfuzur Rahman told a Dhaka-based business journal.
Dhaka’s Response and Ongoing Negotiations
The Bangladeshi government is making a last-ditch effort to negotiate more favorable terms. A high-level delegation led by Commerce Adviser Sk Bashir Uddin and National Security Adviser Dr Khalilur Rahman is currently in Washington for discussions with the Office of the US Trade Representative.
“Dhaka is looking forward to a tariff deal with Washington DC, which, we hope, will be win-win for both countries,” Press Secretary Shafiqul Alam said in a social media post.
Khalilur Rahman, a former UN trade policy official, confirmed that discussions are ongoing and have made “very good progress.” Talks are centred around a potential “Agreement on Reciprocal Tariff,” though the timing of Trump’s announcement casts doubt on whether any deal can be concluded in time to alter the August 1 implementation date.
Departure from Diplomatic Norms
Trump’s decision to publicise these tariff letters through social media – before mailing official copies – has drawn criticism from diplomatic observers. Unlike his predecessors, who typically handled trade negotiations through private channels, Trump has opted for a direct and public approach, often leaving foreign governments little room for pre-emptive discussion or revision.
As the August deadline looms, Bangladeshi exporters are bracing for potential fallout. The higher import duties could dampen demand for Bangladeshi textiles and other goods in the US, the country’s single-largest export market.
Industry leaders have called for urgent policy adjustments and fiscal support to help firms withstand the shock. “We need a coordinated response involving government subsidies, market diversification, and accelerated trade talks,” said Rubana Huq, former BGMEA president. For now, the ball remains in Washington’s court. Whether Bangladesh can secure a deal similar to Vietnam’s remains to be seen. Until then, the spectre of a 35 per cent tariff looms large over its export-driven economy.
