Protectionism endangers ‘win’ from US tariff

The recently concluded US-Bangladesh tariff talks might have been hailed as a “positioning win,” but the outcome, which secured reciprocal 20 percent tariffs for Bangladeshi exports to America, carries risks in a world of rising protectionism and shifting supply chains, economists and analysts have cautioned.

In order to navigate the new trade regime, Bangladesh needs a clear and coherent national strategy, they also said at a roundtable on “Trump Tariffs, Next World Trade and Bangladesh,” organised by Bangladesh Research, Analysis and Information Network (BRAIN) at The Daily Star Centre yesterday.

Bangladesh must rethink its economic strategy in a world that is not “returning to the old liberal order,” argued Rashed Al Mahmud Titumir, a professor of development studies at the University of Dhaka. “We must question not just how we survive, but how we lead.”

The country’s economy, he warned, faces three stress tests: the looming loss of preferential market access after it graduates from least-developed-country (LDC) status in late 2026, the reconfiguration of supply chains away from China, and the surge in protectionist trade rules. Duty-free access, once the country’s great advantage, is ending.

“First-generation advantages such as duty-free access are coming to an end,” he noted, adding that Bangladesh must now prioritise industrial diversification, productivity, and performance-based incentives.

Titumir urged a three-pronged approach that includes expanding into new industries beyond garments, upgrading logistics, technology, and skills, and reforming incentives with transparency and accountability.

The professor stressed that parliament should engage in more strategic decisions.

“Bangladesh’s biggest asset is resilience. We’ve bounced back before, and we will again,” he said.

Economist and political analyst Zia Hassan said Bangladesh’s survival now hinges on a renewed push for export-led growth, arguing that domestic investment alone cannot sustain recovery given depleted reserves and rising import costs.

“We must attract FDI, and the $8 billion trade relationship with the US is crucial,” he noted, pointing to opportunities as global firms diversify away from China under the ‘China Plus One’ approach, under which companies diversify their supply chains and manufacturing beyond China by establishing operations in other countries.

Untapped sectors like electronics, leather, and sportswear could drive growth if proper foundations are built.

He laid out three conditions for attracting investment: social harmony and rule of law, a stable government to avoid political volatility, and a lower cost of doing business through reduced taxes, energy, and logistics costs.

Also speaking at the event, Shafiqul Alam, press secretary to the chief adviser, said no strategy to boost foreign direct investment (FDI) will succeed unless Chattogram Port’s efficiency is significantly improved.

“FDI won’t wait for our logistics to catch up. We have low-cost labour, but that’s not enough. If global brands can’t ship high-value fashion goods within 10 days of order, they will go elsewhere. And they are—many to Vietnam,” said Alam.

He continued that logistics, not wages, is now the real frontline. “Chattogram port is our obvious ‘low-hanging’ fruit. If we can’t fix that, we can’t aim higher.”

Referring to the US tariff talks, the press secretary said the negotiations exposed key structural challenges: logistical bottlenecks, reform gaps, and the need for better global positioning to sustain Bangladesh’s export-led growth in a post-preference world.

“This government understood its limitations and went after actionable, visible reforms,” he also said, citing the scrapping of the Special Powers Act within 10 days of taking office.

He stated that while more extensive tariff reform remains incomplete, Bangladesh has already made progress on the macroeconomic front: inflation has eased, reserves have grown, and GDP growth stands at 4 percent.

On the US tariff talks outcome, he said the 20 percent rate was the result of strategic groundwork by a triad led by Professor Muhammad Yunus, National Security Adviser Dr Khalilur Rahman, and Commerce Adviser Bashir Uddin.

“While critics bemoan the 20 percent, even close allies like the UK and Vietnam got the same. Over 100 countries still have no deal. This is a positioning win,” Alam added.

Meanwhile, Shafiqur Rahman, director of BRAIN, cautioned that there is no guarantee the 20 percent reciprocal tariff offered by the US will remain stable.

“At any moment it could rise to 50 percent, given the unpredictability of the Trump administration,” he said at the event.

Rahman stressed that Bangladesh must adopt a well-defined strategy to compete with global peers and safeguard its economy amid such volatility.

“The unpredictable and often unsuitable tariff regime is not a challenge only for Bangladesh, but for all countries,” he added.

Among others, Jyoti Rahman, economist, Md Rubaiyath Sarwar, managing director of Innovision Consulting, Shamarukh Mohiuddin, director of The Cadmus Group, and Ishrafil Khasru, a readymade garments exporter, addressed the roundtable.