US may further cut tariffs if trade gap narrows

The Trump administration may reduce the reciprocal tariff on Bangladeshi goods further from the current 20 percent if the trade gap between the two countries narrows, Commerce Adviser Sk Bashir Uddin said yesterday.

Speaking at a press conference at the commerce ministry after talks with a visiting US delegation, he said a trade agreement between the two countries could be signed later this month.

The delegation, led by Brendan Lynch, assistant US trade representative for South and Central Asia, is in Dhaka to finalise the deal.

Bashir Uddin said a further cut in tariffs would depend on increased imports of US products to help reduce the roughly $6 billion trade gap.

However, the adviser did not specify how large any reduction might be.

He said the trade agreement featured widely in their discussions. The US delegation had also sought updates on commitments made during the tariff negotiations in July.

Dhaka has targeted higher imports of US liquefied natural gas (LNG), wheat, soybean and cotton to reduce the imbalance.

Bangladesh pledged in July to buy a good number of aircraft from Boeing, but imports may be delayed as the American manufacturer has no available production slots until 2033.

Currently, the two-way trade between Dhaka and Washington remains heavily weighted towards Bangladesh, driven by large volumes of garment exports to the US.

Bangladesh sells goods worth more than $8.2 billion annually to the American market while importing about $2 billion in return.

At the programme, Commerce Secretary Mahbubur Rahman said Bangladesh narrowed the trade gap by $600 million in the last fiscal year of 2024-25. In the first two months of the current year, the gap shrank by a further $276 million.

Meanwhile, the commerce adviser said yesterday's discussions covered Bangladesh's commitments to increase sourcing from the US, especially in agriculture, energy and aviation. He said procurement talks had made notable progress.

On wheat imports from the US, he said American wheat contains 10 to 15 percent more protein than Russian wheat and is currently cheaper. This, he said, is likely to encourage private sector buyers to source wheat from the US.

Alongside cotton, private firms have also stepped up imports of soybean products from the US, the adviser added.

National Security Adviser Khalilur Rahman, Commerce Secretary Mahbubur Rahman and other senior officials attended yesterday's meeting.

The US team arrived in Dhaka earlier in the day for a three-day visit. Commerce ministry sources said the US delegation may also meet with top officials of the chief adviser's office, Foreign Affairs Adviser Md Touhid Hossain and Foreign Secretary Asad Alam Siam.

After lengthy negotiations with the Office of the US Trade Representative, the Trump administration in August set a 20 percent tariff on Bangladeshi goods. Dhaka expects exports to rise under the lower rate, which is well below those faced by competitors such as China and India.

Vietnam, another major rival in global garment markets, got a 20 percent tariff. However, the Trump administration said this could rise to 40 percent if goods are sent to the US through transshipment.

Bangladesh is the third-largest garment exporter to the US market after China and Vietnam, with a 9.3 percent share of the $81 billion American apparel import.