Originally posted in The Business Standard on 11 May 2025
US-China trade talks in Switzerland: What Bangladesh stands to gain
While a breakthrough from the US-China trade talks in Switzerland will be a relief for the world economy, tariff walls look set to stay still high for China, prompting Chinese firms to relocate to countries with lower tariffs. Economists and exporters talk about what advantages Bangladesh has and what it needs to do to get some of those firms before they rush to Vietnam and other Southeast Asian countries.
US negotiations with other countries also a factor
Mustafizur Rahman
Distinguished Fellow, Centre for Policy Dialogue (CPD)
The US is negotiating bilaterally with other countries, so we have to see what bilateral discussions are held with Bangladesh ultimately. It also depends on the 10% additional tariff and what compromises we have had to make and their economic implications.
Depending on how much tariff is put on China, we have to see what advantage we can get from that, which will depend on our situation. We have greater cotton-based exports, for example. In the markets we compete with China on, we may get an advantage because of tariff differentials. It’s all very unpredictable.
If we can get investments targeting US markets, we could get some benefits. There are also talks of cotton warehouses for the US, so if we can export cotton, that would be good. In the medium term, the US had said earlier that we are not ready for Free Trade Agreements (FTA) negotiations due to labour standards, intellectual property and other regulatory concerns, which is partially true. If we can address these concerns, we could do FTA negotiations too.
So, we have to see this from a multidimensional perspective. The US and China are just one part of the puzzle. We have to see how negotiations with other countries like Vietnam goes. If they put an additional 5% on Vietnam and 10% on us, it will be a different scenario. So, there are a lot of factors involved, and as for the concerns they have raised about us, this is not just their concern. It is a concern for anyone who wants to invest in our country. So, we must address these.
TBS’ Shadique Mahbub Islam spoke to Mustafizur Rahman over the phone.
