Originally posted in The Business Standard on 22 January 2025
From tariff war to exit from WHO: How Bangladesh 2.0 will fare during Trump 2.0
How will Bangladesh be impacted by Trump’s decisions? The Business Standard spoke to four experts — an economist, a public health expert, a former diplomat and a climate change expert — to find out
The Golden Age of America begins right now.
With this one declaration that summarises his objective, Donald Trump has begun his second term at the White House as the 47th President of the United States. Trump has already withdrawn from the World Health Organization (WHO) and the Paris Accord, tightened citizenship policies, and imposed tariffs, among other decisions that will impact the rest of the world.
How will Bangladesh be impacted by such decisions? The Business Standard spoke to four experts — an economist, a public health expert, a former diplomat and a climate change expert — to find out.
Everything depends on the route Trump is going to take
Professor Dr Mustafizur Rahman, distinguished fellow, CPD
It is hard to tell to what extent the effects of the tariffs would be since it has not been determined yet. If Donald Trump imposes a blanket tariff on every country, like a 10% tariff on all imports, it will not make much of a difference for us. However, the impact of differentiated tariff rates for different countries will be noteworthy. For this, we need to wait to find out what route Trump is going to take.
Suppose Trump imposes a 50% tariff on ready-made garment (RMG) imports from China and 10% on RMG imports from Bangladesh. Then there is a chance for our industry to reap benefits since 93% of our exports to the United States are RMG. Our RMG has strong supply-side linkages. We can easily increase our production. Since we are already a large-scale producer of RMG, our exporters will be quickly able to take advantage.
At the same time, if everyone is under animated suspense that Trump will impose more tariffs on China, then the market can react accordingly, not necessarily because of the actual trade war, but because of the speculation of it.
Trump may also emphasise various industry standards like labour rights and stricter inspection of product qualities as a protectionist measure.
We were arguing that we need some international support measures for our Least Developed Country (LDC) graduation. It is speculated that Trump will take a strong stance against such measures. This challenge coincides with Bangladesh’s upcoming graduation from LDC status, potentially intensifying competitive pressures on its exports.
We must also remember that such gains from trade wars are usually short-term. We need to make any gain sustainable, if we get any due to differential tariff rates. Trade wars are usually harmful to the consumers. So, there can be an impact of that on the market as well.
Everything depends on what Trump decides to do in the upcoming days.