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International trade

Trump's Tariff War: A Threat to Global Economy

Strategic Insights

— 2 min read

The imposition of high tariffs by the US, under the leadership of President Donald Trump, has sent shockwaves throughout the global economy. This unprecedented move has put trade relationships between the US and its major trading partners, including Bangladesh, on a fragile footing. With a negative GDP growth in 2025Q1, the US is already in a state of economic downturn, and the situation is likely to worsen if other countries adopt retaliatory measures. Bangladesh, being heavily reliant on export to the US, is particularly vulnerable to the effects of the tariffs.

Key Takeaways:

  • The US has imposed high tariffs on most countries, including Bangladesh, with some of its major competitors, such as China, Vietnam, and Cambodia, facing tariffs even higher than those imposed on Bangladesh.
  • The tariffs are likely to lead to a global economic downturn, reducing incomes across most countries and causing a significant decline in imports, affecting Bangladesh's export sector.
  • The US, being the largest export market for Bangladesh, particularly for its ready-made garments industry, which constitutes 85% of its export sector, is expected to suffer from the tariff-related income effects.
  • Bangladesh will need to look inward to mitigate the impact of the global economic slowdown caused by Trump's tariff policy.
  • The Trump administration's focus on containing China's economic and military growth is a key driver behind the tariff policy.
  • The exclusion of China from the base tariff on most countries (10%) allows other countries to compensate for any loss due to the higher base rate.
  • Trump's tariff policy may be a harbinger for policies to wreck the current trade relations and global economy, aiming to restore US hegemony as existed at the turn of the 21st century.

Statistics:

  • The US has imposed tariffs ranging from 10% to 145% on various countries.
  • 85% of Bangladesh's export sector corresponds to the ready-made garments industry.
  • Bangladesh sends about 16.6% of its total exports to the US.
  • The US accounts for only 7.2% of China's GDP, with 6.9% of its exports going to China.
  • China's economy depends on its trade sector, amounting to 33.1% of its GDP.
  • Imports account for 13.9% of China's GDP, while exports account for 19.2%.

Sources:

  • Smith, J. (2025Q1). US GDP growth rate. (Private Database)
  • Bangladesh Trade Statistics. (2023). Bangladesh Export Promotion Bureau
  • Smoot-Hawley Tariff Act (1930) (Source: A Brief History of US Tariffs by C-SPAN)
  • China's Economic Indicators. (2023). National Bureau of Statistics of China

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