US High Tariff Policy a ‘Wake-Up Call’ for Bangladesh: Dr Fahmida

DHAKA, 12 April 2025 – The United States’ newly adopted high tariff strategy serves as a critical wake-up call for Bangladesh as the country prepares to transition out of its Least Developed Country (LDC) status, warned Dr Fahmida Khatun, Executive Director of the Centre for Policy Dialogue (CPD), on Saturday.

Preparing for a Post-LDC Future

Speaking as the chief guest at a shadow parliament debate held at the Bangladesh Film Development Corporation (BFDC) in Dhaka, Dr Khatun emphasised the urgency for Bangladesh to build trade resilience and strengthen export competitiveness, given that preferential duty facilities currently enjoyed by LDCs will no longer be available after graduation.

“The high tariff policy introduced by the United States is a signal that we must enhance our trade preparedness. The temporary 90-day suspension of reciprocal tariffs brings limited relief, but the bigger message is clear – we must act now,” she said.

Backdrop: US-China Tariff Moves and Implications

The remarks come in the wake of escalating tariff tensions between the US and China, which have created ripple effects across global supply chains. Dr Khatun noted that the imposition and temporary withdrawal of reciprocal tariffs by the US – and the countermeasures from China – indicate that a trade war may already be unfolding.

Key Timeline of Tariff Developments:

Call for Political Stability and Reforms

In her speech, Dr Khatun highlighted the role of political stability and a secure investment climate in fostering economic resilience.

“If we can ensure political stability and uphold law and order, we can create a truly investment-friendly environment,” she stated, adding that policy consistency and institutional reform are essential for long-term growth.

Event Overview and Key Takeaways

The shadow parliament, organised by Debate for Democracy, focused on how Bangladesh should strategically respond to the shifting global trade environment. The session was chaired by Debate for Democracy President Hasan Ahmed Chowdhury Kiron and included youth participants debating critical economic challenges.

Key Recommendations from the Event:

Establish a national strategy for post-LDC trade.

Diversify export markets beyond the US and EU.

Enhance trade negotiation skills and diplomacy.

Attract foreign direct investment through legal and institutional reforms.

Expand preferential trade agreements with regional partners.

Focus on high-value manufacturing and tech-based exports.

Build capacity for compliance with international trade standards.

Leverage digital trade platforms.

Improve customs and port efficiency.

Ensure continuity in economic policymaking through political consensus.

The Bigger Picture

Bangladesh is scheduled to graduate from LDC status by 2026, after which it will no longer receive preferential tariff treatments under schemes such as the US Generalized System of Preferences (GSP). With exports heavily reliant on ready-made garments, which make up over 80% of total export earnings, the stakes are high.

Economists believe that Bangladesh must urgently diversify its export base, invest in productivity and innovation, and adopt a forward-looking trade policy to safeguard economic growth.

As trade dynamics shift globally, the message from experts is clear: Bangladesh must act swiftly and strategically to secure its place in the new trade order.