In a striking turn of diplomatic fortune, Bangladesh has emerged with a more favourable trade arrangement under U.S. President Donald Trump’s sweeping new tariff regime—prompting pointed remarks from Dhaka aimed at neighbouring India. While Trump’s executive order imposes import duties of up to 41% on 70 countries, Bangladesh secured a 20% tariff rate, compared to India’s 25%, after months of negotiations.
Strategic Deals and Symbolic Wins
Bangladesh’s acting government marked a memorandum of understanding to import 700,000 tonnes of wheat annually from the United States. The agreement, inked by Food Department Director General Md Abul Hasanat Humayun Kabir and U.S. Wheat Association Vice President Joseph K. Sower, was hailed by Food Adviser Ali Imam Majumdar as a step toward “broader mutual trade cooperation” and “food security.”
The deal is part of a larger package that includes plans to purchase 25 Boeing aircraft and increase LNG imports from the U.S.—moves that signal Dhaka’s intent to deepen economic ties with Washington.
On the same day, the U.S. Embassy in Dhaka confirmed that joint military exercises between the two nations would continue, reinforcing a growing strategic partnership. “These efforts help to make the United States and Bangladesh stronger, and the region safer,” the embassy stated.
Tariff Breakdown: Bangladesh vs. India
Trump’s tariff overhaul, effective August 1, levies a 25% duty on Indian exports to the U.S., while Bangladesh negotiated its rate down to 20% from an initially proposed 35%. The difference has emboldened Dhaka to publicly contrast its diplomatic success with India’s outcome.
Bangladesh’s National Security Advisor Khalilur Rahman, who led the negotiations, said the reduced tariff was tied to Bangladesh’s willingness to address U.S. crises about exchange imbalances, non-tariff barriers, and security partnership. “India was slapped with a 25% tariff due to its inability to reach a comprehensive trade agreement,” Rahman claimed, adding that Bangladesh’s commitments were “consistent with national interests and capabilities.”
Protecting the Garment Sector
Rahman emphasized that safeguarding Bangladesh’s garment and textile industry—often described as the backbone of its economy—was a top priority. The 20% tariff, he said, keeps Bangladesh competitive against regional rivals like Sri Lanka, Vietnam, Pakistan, and Indonesia, which face similar or higher rates.
To secure the deal, Bangladesh committed to purchasing U.S. agricultural products, including wheat, cotton, soybeans, and pulses, worth billions of dollars. While some experts question the economic viability of these purchases, Rahman framed them as strategic moves to support food security and build goodwill with U.S. farming states.
India’s Response and Strategic Calculus
India, meanwhile, faces a 25% tariff on its exports and an unspecified penalty for importing Russian crude oil and military equipment. Trump’s announcement is widely seen as a pressure tactic aimed at pushing New Delhi toward a more favourable trade alignment with Washington.
Indian officials have noted that they are learning the significance of the taxes and will take “all necessary steps to safeguard and promote national interest.” The delay in finalising a trade agreement with the U.S. has now become a point of diplomatic friction, with Bangladesh positioning its success as a model of strategic negotiation.
