Experts urge govt to review US trade deal

Experts have urged Bangladesh to proceed with caution in reviewing its Agreement on Reciprocal Trade (ART) following a US Supreme Court ruling that struck down the sweeping tariffs imposed under President Donald Trump. 

The decision has fundamentally altered the framework under which the country had negotiated preferential rates, creating both risks and opportunities for exporters.
Bangladesh signed the ART deal on 9 February – just three days before the national election – securing a reduction in reciprocal tariffs to 19% from 20%. 

However, the Supreme Court’s 20 February verdict has effectively reduced that rate to 10% for at least 150 days while the US conducts country-specific reviews. Any tariff agreements exceeding 10% will be temporarily adjusted downwards during this period.

Following the Supreme Court ruling, President Trump announced a flat 10% tariff on imports into the United States, effective from 24 February for 150 days. The measure replaces the earlier, higher reciprocal tariffs and applies to all trading partners, although exemptions remain for certain sectors, including pharmaceuticals, and goods entering under the US-Mexico-Canada agreement.

A White House official said the administration may later seek to implement “more appropriate or pre-negotiated tariff rates”, signalling that further adjustments could follow, according to media reports.

Industry insiders say the temporary reduction could provide relief to buyers and potentially boost work orders. Yet they caution that the US may investigate allegations of unfair trade practices within the next 150 days. If proven, tariffs of up to 50% could be imposed; if dismissed, they might be reduced to zero.

A critical 150-day window

Dr Zahid Hussain, former lead economist at the World Bank’s Dhaka office, emphasised that strategy, rather than emotion, is now essential. “Bangladesh should use this 150-day window to identify potential areas of complaint, strengthen labour and environmental compliance, improve trade transparency, analyse the positions of competing countries, and prepare for renegotiations under the new realities,” he said.

He described the temporary drop from 19% to 10% as positive in the short term, easing competitive pressure. 

“But this is not a permanent solution. What happens after 150 days will depend on US investigations and political decisions. Preparation, strategy, and policy firmness are now most important,” he added.

Professor Mustafizur Rahman, Distinguished Fellow at the Centre for Policy Dialogue (CPD), noted that the Supreme Court ruling represents “a major shift in the global trade structure” that could directly affect Bangladesh. The previous framework, which planned a gradual reduction from 37% to 19%, has effectively lost its legal basis.

Ensuring equivalent benefits

Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said that while Bangladesh had previously gained advantages under the 19% tariff, the court’s ruling has nullified that framework. 

“The new 10% tariff applies to all countries, so our previous advantage is not automatically restored. It is essential to review what Bangladesh is giving and receiving under the agreement,” he said.

He stressed that any additional concessions to the US must be matched by equivalent benefits. “Otherwise, the agreement could be considered unequal,” Hatem warned.

Faisal Samad, director of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), described the situation as primarily legal. 

“We need a few working days to understand the full picture. However, if the 10% rate is fixed and the total effective tariff stands at 26.5%, Bangladeshi exporters may gain,” he said.

Khadija Nazneen, additional secretary of the WTO wing of the Commerce Ministry, confirmed that the government would carefully review the agreement before taking a final decision. 

“The deal contains an exit clause. We will decide in line with the new government’s policy,” she said.