Trump's Tariff Blitz: Uncertainty Looms as Global Trade Growth Slows

Uncertainty looms large over the global trade landscape as US President Donald Trump has escalated the trade war by imposing new tariffs on 14 countries, including Bangladesh. Despite a modest growth in global trade during the first half of the year, the pace of growth remains uncertain due to Trump's unpredictable tariff policy. The new tariffs on Bangladesh will result in a total tariff of 50 per cent on Bangladesh, increasing the price of Bangladeshi products by at least 35 per cent and leading to a decline in demand for Bangladeshi goods.

Key Takeaways:

• Trump has imposed 35 per cent tariffs on Bangladeshi products imported into the US, resulting in a total tariff of 50 per cent on Bangladesh.
• The imposition of new tariffs is a breach of WTO rules and commitments, as the US is committed to enhance the tariff rate up to 3.40 per cent on average, but is currently applying a tariff rate of 3.30 per cent on all products.
• The new tariffs will increase the price of Bangladeshi products by at least 35 per cent, leading to a decline in demand for Bangladeshi goods and a probable decline in exports from Bangladesh to its largest destination.
• Trump has hinted at room for negotiation and encouraged Bangladesh to work hard to get a reduced rate of tariffs, but the unpredictability and inconsistency of the Trump administration make it difficult to predict the outcome of any potential negotiations.
• The imposition of tariffs is also driven by geopolitical factors, with some speculating that a strong presence of the Indian lobby may have played a role in Trump's imposition of higher tariffs on Bangladesh, as India is negotiating a bilateral trade deal with the US and may face a 20 per cent tariff.

Statistics:

• The US bilateral trade deficit with Bangladesh was $6.16 billion in 2024, with exports from Bangladesh totalling $8.36 billion.
• The imposition of 35 per cent tariffs on Bangladesh's exports will result in a decline in demand for Bangladeshi goods and a probable decline in exports from Bangladesh to its largest destination.
• The US is committed to enhance the tariff rate up to 3.40 per cent on average, but is currently applying a tariff rate of 3.30 per cent on all products.
• The World Tariff Profile 2025, released by the WTO, shows that the bound tariff rate of the US is 3.4 per cent and the MFN applied rate is 3.3 per cent for all products.

Sources:

• Donald Trump, US President
• World Trade Organisation (WTO), World Tariff Profile 2025