TDS Desk:

Bangladesh’s economy could face serious disruption following sweeping new US import tariffs, warns a recent report by the United Nations Conference on Trade and Development (UNCTAD). The report raises concerns that these tariffs—introduced under former US President Donald Trump—pose a significant threat to the export prospects of least developed countries (LDCs) like Bangladesh, particularly in the garments and agriculture sectors.

UNCTAD’s report, Sparing the Vulnerable: The Cost of New Tariff Burdens, states that although countries like Bangladesh contribute only 0.3% to the US trade deficit, they may face import duties of up to 44%. This could severely hinder their access to the US market and exacerbate global economic inequality.

The report urges immediate international cooperation, suggesting tariff relief mechanisms and preferential market access for developing nations. Without such measures, a new form of discrimination may emerge within global trade, stalling sustainable development efforts.

In response, Bangladesh’s National Board of Revenue is reportedly considering duty concessions on 100 US goods in the upcoming budget, hoping to ease trade tensions and promote bilateral commerce.

Meanwhile, Bangladesh’s overall economic outlook continues to deteriorate. The World Bank has revised its GDP growth forecast for FY2024–25 down to 3.3%—the lowest in 36 years—citing declining investment, persistent inflation, financial sector fragility, and political instability.

Franziska Ohnsorge, Chief Economist for the World Bank’s South Asia Region, noted that low public revenue remains a key weakness in South Asia, threatening stability in an uncertain global environment.

ADB also downgraded Bangladesh’s growth projection to 3.9%, down from its earlier forecast of 4.3%. It identified inflation, worker unrest, and poor investment confidence as contributing factors.

The IMF echoed similar concerns, predicting 3.8% GDP growth for the year. It noted that subdued economic activity has dampened consumption, which in turn has weakened overall growth.

Analyst T I M Nurul Kabir highlighted a significant drop in capital machinery imports—down 30%—reflecting stalled investment. He warned this would ultimately impact job creation and slow the broader economy further.

According to Bangladesh Bank, FDI fell sharply to $104.33 million in Q1 of FY2024–25 from $360.5 million a year earlier, reflecting a widespread investor retreat due to political unrest and economic uncertainty.