Bangladesh’s trade policy experts and industry leaders are urging a cautious reassessment of the country’s American Reciprocal Trade (ART) agreement after a recent ruling by the U.S. Supreme Court reshaped the tariff framework that had underpinned earlier negotiations with Washington.
The agreement, signed on Feb. 9, secured a reciprocal tariff rate of 19%, slightly reduced from 20%. A Feb. 20 court decision invalidating broad tariff measures introduced during former President Donald Trump’s administration has temporarily lowered tariffs to a flat 10% for at least 150 days while the United States conducts country-specific trade reviews.
The revised rate, which came into effect on Feb. 24, applies broadly to trading partners, with limited exemptions such as pharmaceuticals and goods covered by the United States-Mexico-Canada Agreement.
Analysts say the sudden policy shift creates both short-term relief and long-term uncertainty for Bangladeshi exporters. Lower tariffs could ease cost pressures and potentially boost orders, yet the ongoing U.S. review process may also trigger investigations into alleged unfair trade practices.
If violations are confirmed, duties could rise as high as 50%, while a clean review could lead to further reductions.
Economist Zahid Hussain, formerly with the World Bank’s Dhaka office, said the temporary window should be used strategically to strengthen labor and environmental compliance, improve trade transparency, and prepare for renegotiations.
He noted that the reduction to 10% offers immediate competitive relief but warned that the long-term outcome will depend on political decisions and the findings of U.S. investigations.
Policy experts also highlight the broader implications of the court ruling. Mustafizur Rahman of the Center for Policy Dialogue described the decision as a significant shift in the global trade environment, effectively removing the legal basis for the earlier tariff reduction pathway that had been negotiated with the United States.
Industry representatives are calling for a careful evaluation of the agreement’s balance. Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association, said the universal 10% tariff eliminates Bangladesh’s previous advantage and stressed that any concessions offered to Washington must be matched by equivalent benefits.
Meanwhile, Faisal Samad of the Bangladesh Garment Manufacturers and Exporters Association said exporters could benefit if the revised tariff structure stabilizes, though the full legal implications remain unclear.
Government officials have signalled that no immediate decision will be made. Khadija Nazneen, additional secretary at the Commerce Ministry’s WTO wing, confirmed that authorities will conduct a detailed review of the agreement, noting that an exit clause provides flexibility as the new administration evaluates future trade policy.
The evolving tariff landscape underscores the fragile balance facing Bangladesh’s export-driven economy, as policymakers weigh short-term gains against longer-term risks while navigating a rapidly changing global trade framework.
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