Trump’s 10% tariff heightens scrutiny of Bangladesh-US trade deal

by Asif Showkat Kallol (Dhaka Bureau)

The United States has begun enforcing a 10% global import tariff, marking another sharp turn in an unsettled trade agenda under President Donald Trump. The measure took effect early Tuesday in Washington, following earlier threats of a 15% levy after a legal setback at the United States Supreme Court.

Although Trump publicly floated higher duties, official documents confirm enforcement at the 10% level, with no directive authorising escalation. The White House offered no response to requests for clarification.

Trade analysts warn that rapid policy reversals now drive uncertainty across global markets. Carsten Brzeski of ING said unpredictable tariff shifts heighten retaliation risks and revive fears of wider trade confrontation.

The administration cited Section 122 of the 1974 Trade Act, which grants presidents temporary authority to impose import duties for up to 150 days without congressional approval. Trump framed the move as a tool to counter trade imbalances and shield domestic producers. Yet economic indicators weaken that argument. US trade deficit figures climbed 2.1% from 2024 levels, reaching nearly $1.2tn, while emergency trade powers have already generated at least $130bn in tariff revenue.

In a 6-3 decision, the Supreme Court ruled that earlier global tariffs exceeded presidential authority. Trump dismissed the judgment as poorly reasoned and hostile to American interests.

Governments worldwide have since reassessed trade strategies. The UK signalled potential countermeasures, while rejecting escalation. The European Union paused ratification of a pending agreement, and India postponed negotiations.

Attention has now shifted to a recently signed reciprocal trade agreement between the US and Bangladesh, finalised weeks before national elections. A White House letter to Prime Minister Tarique Rahman urged Dhaka to sustain momentum on implementation and advance pending defence accords, signalling a clear merger of trade access and security alignment.

Previously shielded by non-disclosure provisions, the published text outlines extensive US leverage over trade regulation, digital policy, agriculture, procurement, and export controls. Bangladesh receives tariff relief contingent on unilateral US compliance assessments, backed by reimposition threats.

Critics argue that the interim administration rushed the agreement through without public scrutiny, binding future governments to long-term obligations. The text obliges Dhaka to mirror US export controls and adopt restrictive measures supporting American security actions, effectively importing US geopolitical conflicts into Bangladeshi trade policy.

In a multipolar global economy, such commitments risk constraining relations with China, India, the Gulf states, ASEAN, Japan, South Korea, and Europe. Clauses also limit Dhaka’s freedom to pursue alternative trade deals, technical standards, or digital and energy partnerships that Washington disfavors.

One benefit nevertheless emerges. Garments produced with US cotton and man-made fibre qualify for zero tariffs in the American market, potentially strengthening export competitiveness. Whether that advantage outweighs constraints on economic sovereignty remains fiercely contested.

Economists have urged caution after Trump later raised the tariff threat to 15%, despite the court ruling that invalidated earlier 20% reciprocal duties. Zahid Hussain, former World Bank lead economist in Dhaka, advised strategic use of the 150-day window to assess vulnerabilities and reinforce labour and environmental compliance.

Mustafizur Rahman of the Centre for Policy Dialogue warned against abrupt withdrawal, while economist Selim Raihan stressed that persistent policy volatility in Washington could deter long-term orders, muting gains for Bangladesh’s garment sector.

As tariff threats oscillate between warning and enforcement, smaller economies face rising pressure, where market access increasingly arrives bundled with geopolitical alignment.

————————————————————————————————————————————————————————